Category: Behavior Finance
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Investor sentiment shifts
We’ve seen a notable shift in investor sentiment. AAII Sentiment Survey: Pessimism surged to its highest level in more than three months, while optimism plunged. Plus, this week’s special question asked AAII members to share… Read More
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Investor sentiment is dialed up with stock trends
I believe there are many factors that drive stock prices and one of them is investor sentiment. However, enthusiasm and panic can also reach extremes, which drives the opposite trend. When investors are extremely bullish… Read More
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You probably want to invest in stocks
You probably want to invest in stocks right now, I bet. If you are already invested in stocks, you probably want to be more aggressive in investing in stocks. Maybe it’s selling bonds to buy… Read More
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Keeping the mind right with investor sentiment indicators
Investors oscillate between the fear of missing out and the fear of losing money. After their portfolio trends up, they extrapolate recent gains into the future. After their portfolio falls, they extrapolate recent loss into… Read More
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By and large, the stock market is correlated with consumer sentiment
I’ve shared some observations about investor sentiment this past week as sentient indicators and surveys have reached an extreme level of optimism. When sentiment reaches an extreme, we should prepare for it to swing the… Read More
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Can an optimistic investor sentiment measured by the AAII Investor Sentiment Survey trend higher?
Someone asked: Can an optimistic investor sentiment in AAII Investor Sentiment Survey trend higher? Another commented: The AAII Investor Sentiment Survey is just over its long term average, so it has room to run. Of… Read More
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Investor optimism is reaching extremes
Ok, so this isn’t anything new. I just discussed it last week in “Investor sentiment signals greed is driving stocks as the U.S. stock market reaches short term risk of a pullback.” The sentiment indicators keep… Read More
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Investor fear has been driving the stock market down
I like to observe the return drivers of price trends. Though I primarily focus on the direction of the price trend and volatility, I also consider what drives the price trend. Yesterday I suggested the… Read More
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Investor sentiment gets more bearish
Investor pessimism shifted to an unusually high level for the time this year. It spiked up from 24% bearish to 41%. Bearish investor sentiment is now as high as it was in April after the… Read More
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Growth Stocks have Stronger Momentum than Value in 2018
After a sharp decline in stock prices in February that seemed to shock many investors who had become complacent, the stock market indexes have been trying to recover. At this point, the popular S&P 500… Read More