|
THE CNN MONEY FEAR AND GREED INDEXYesterday I was going on about the new JSE website and how they could have done something really innovative within the financial industry, fortunately tonight I can talk about something in the financial industry that is innovative. Introducing the Fear and Greed Index. When it comes to investing, if you’ve met a financial planner you’ll have heard them talking about the different types of investors. Each financial advisor has different terminology, but at the end of the day it boils down to emotions around fear and greed. The StockShop.co.za describes it well: CNNMoney have come up with their own index ranging from 0-100 that tries to quantify the level of fear (0) and greed (100) in the market. Fear is usually synonymous with selling, extreme fear usually leaves a stock sold way past it’s value point, while greed is synonymous with buying, extreme greed leaves a stock over-priced. But the Index is not this simple. There are 7 different indicators that they take into account for this index:
Here is an example: This is a really useful overall measuring stick that’s worth keeping your eyes on. |
|