Andrew Binetter: Uncertainty in Today’s Investment Markets

Recent developments in world markets have been unprecedented. Some of the largest stock markets and indexes have seen record highs and corresponding lows as trade disputes and a strengthening U.S. economy have generated upheaval. This volatility in the markets have driven investors to seek new information and new guidance.

Some of the information investors sought have revealed insights into the prevailing atmosphere – one of uncertainty and of fear.

Investopedia, a leading online financial knowledge resource, has tracked many of the terms investors are searching for, and have noticed a strong uptick in interest of what the market is doing and where it is headed. In this article, we’ll take a look at some of the terms that are driving investor search traffic.

Highest Spike: “Bear Market”

The term “bear market”, or a market in which share prices are plummeting, experienced the largest spike in search traffic by Investopedia, showing a nearly 6500% increase in interest in the final weeks of 2018. According to a survey conducted by the American Association of Individual Investors, 50.3% of investors were bearish on the market, while nearly 32% were bullish.

Capitulation

Showing an 869% spike in interest, the term “capitulation” is closely related to bear markets. In simple terms, the work means investors selling off holdings during declines in the stock market, erasing any gains they may have had previously. In December, 2018, just over $75 billion in assets were sold off from exchange-traded and stock mutual funds in the United States alone. This massive figure represents the largest amount of asset outflow ever recorded.

Market “Correction”: Generating Search Traffic

When stock markets see dramatic increases in investor activity and price, there are times when those markets undergo correction. Investopedia defines the term “correction” as a 10% or greater decline in the price of a given security from its most recent high or peak. Many investors wondered if a market correction was coming, and so increased search traffic on the Investopedia website to the tune of 655%. A similar review of Google search traffic indicated that many other people around the world were searching for information about corrections, with the highest interest in the term appearing toward the end of 2018.

Light at the End of the Tunnel: “Bubble”

All was not doom and gloom in investing information searches. While market volatility and an uncertain future have led many investors to brush up on some of the most fear-inducing investment terms, there was one term that actually experienced a drop in search traffic. That term was “bubble”, or the phenomenon of a given market or security experiencing a short or unusual spike in price before losing value rapidly. This term has been used to characterize several investment markets, such as in real estate or stock indexes. Bubble saw a 13% decline in search traffic volume in the later part of 2018.

Article brought to you by Andrew Binetter

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