Category: Behavioral Finance
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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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A volatility expansion seems imminent
On November 16th, about two weeks ago, I shared an observation in “Periods of low volatility are often followed by volatility expansions” that implied and realized volatility had reached such a low level we should… 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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Feeling and Doing the Right Thing at the Right Time
Last week I shared the observation that VIX Implied Volatility is Settling Down. The VIX Index is a measure of the market’s expectation of future volatility, so the market is pricing in less volatility from here. However,… Read More
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The stock market trends up with momentum
When the stock market indexes swing up or down 1% or more I try to share my observations of the directional trend and changes in volatility. Continuing from my observation yesterday in Observations of the stock market… Read More
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What trends are driving emerging markets into a bear market?
In Emerging Markets Reached a Bear Market Level we noted the emerging markets index has declined -20%, which is considered to be in bear market territory. The emerging markets index includes 24 countries classified as emerging countries. To… Read More