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The Anxiety Index: How Behavior Based Investing Shapes Our Market

What are investment trends showing us about the state of the nation?

With millions of Americans out of work during a global pandemic, many are left feeling anxious about the economy and their finances. Caleb Silver, editor-in-chief of Investopedia joins Roben Farzad to discuss the Anxiety Index and how investor behavior at various stages can give an in-depth look into future relations. 

“We're going to have a lot  of bankruptcies and a lot of foreclosures. We're going to have a lot more layoffs, we're going to hear about a lot more layoffs in the next month or two. It's going to be a terrible quarter for that, historic in fact.” -Caleb Silver, editor-in-chief of Investopedia and CNN's former head of U.S. Business News.

 

Embed picture: https://drive.google.com/open?id=1gxdjVrnz-oJPSQxfbdTen2JDWc7CKxzX 

The show airs each Saturday on VPM News 88.9 FM at 6:00 p.m. and Sundays at 8:00 p.m.

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Episode excerpt

The following excerpt was edited for clarity. 

[8:23]

Roben Farzad: The Anxiety Index measures traffic spikes to fear based terms around the economy, markets and personal finance. Do you clock it at all-time highs right now?

Caleb Silver: It was at an all-time high a few weeks ago, four weeks ago to be exact, it usually spikes. It measures fear based terms across the market so things like bear market volatility and double dip. It also measures economic terms like recession and depression, and personal finance terms like liquidity and bankruptcy. So when we see traffic spikes, people looking and searching up those articles and what they mean and what they should do about that if it comes their way, we can tell their anxiety is pretty high. As if it has been screaming like a four year-old in a toy store when it’s time to go. It’s mellowed out a little bit recently. But, people are very anxious right now and not just about the markets, but around their personal finances as well. We’re seeing that because we have so many readers who are coming to us either directly or through Google every day, we know what they care about and how they feel about it. It allows us to have our finger on the pulse of the individual investor in a very unique way. 

Farzad: So what is the market telling you right now? March 23, I think it was down at its peak at 32%. It was a true bear market, and then you’ve had a rally of about 30%. There seems to be remnants of that melt up psychology that’s still there on days when you have the market down. Suddenly, it seems to end up again, who is pushing it up? What are these investors romancing exactly? Because we’re still losing millions of jobs.

 

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