Investor Intelligence Sentiment Index: A Comprehensive Guide

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The Investor Intelligence Sentiment Index (IISS) is a valuable tool for investors and analysts alike. It measures the overall sentiment of investors towards the stock market.

The IISS is based on a survey of investors and analysts, with a total of 50 participants from various financial institutions. This diverse group provides a comprehensive view of market sentiment.

The IISS is published weekly, providing timely insights into market trends. It's a reliable source of information for making informed investment decisions.

What is an Index?

An index is a numerical value that represents a specific market or economic condition. The Investors Intelligence Sentiment Index is a great example of this.

This index surveys over a hundred independent market newsletters to gauge the sentiment of investment advisors. It produces three numbers: the percentage of advisors that are bullish, bearish, or expecting a market correction.

The survey has been widely adopted by the investment community as a contrarian indicator. It's been around since 1963 and has had a consistent record for predicting major market turning points.

The index is based on weekly polls of investment advisors and produces three key numbers. These numbers are useful for measuring market sentiment and predicting future trends.

History and Development

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Investors Intelligence was created in 1963, making it one of the longest-standing providers of technical research in the world.

The company has been in operation for over 50 years, a testament to its enduring value to the investment community.

Its mission has always been to generate consistently valuable, clear, unambiguous, and accurate investment research.

Who Invented the Index?

AW Cohen is the person behind the Investors Intelligence Sentiment Index. He developed the investor intelligence survey, which was initially expected to indicate the best time to be long the market when most investment advisors were bullish.

History of the Index

Investors Intelligence was created in 1963, making it one of the longest-standing providers of technical research in the world.

The company has been in operation for over 50 years, a remarkable milestone in the financial industry.

The Investors Intelligence Sentiment Index has been widely adopted by the investment community as a contrarian indicator.

It is followed closely by the financial media, a testament to its importance in the world of finance.

The mission of Investors Intelligence has always been to generate consistently valuable, clear, unambiguous, and accurate investment research.

Understanding the Index

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Investors Intelligence was created in 1963, making it one of the longest-standing providers of technical research in the world.

The Investors Intelligence Sentiment Index has been in operation for over 50 years, offering a wealth of experience and expertise to investors.

It's widely adopted by the investment community as a contrarian indicator, which means they use it to gauge the mood of the market and make informed decisions.

The report has been followed closely by the financial media for many years, demonstrating its importance and relevance in the industry.

Its mission is to provide consistently valuable, clear, unambiguous, and accurate investment research, which is a promise that has been kept for over five decades.

Initially, the report was intended to provide direct recommendations on bullish and bearish sentiments, but now it's used in a more nuanced way to identify extreme values in the market.

Comparing Indexes

The AAII Sentiment Survey has been around since 1987, providing valuable market sentiment data from individual investors.

Credit: youtube.com, Manulife Investor Sentiment Index (MISI 6) - Sentiment

The AAII Sentiment Survey asks individual investors about their thoughts on where the market is heading in the next six months.

One key difference between the AAII and Investors Intelligence Sentiment Index is the focus on who provides the opinions - individual investors versus investment advisors and commentators.

These investment advisors and commentators are supposed to be professional analysts and traders, providing a unique perspective on the market.

Evaluating Reading Quality

A good Investors Intelligence Sentiment reading is one that falls between 35% and 55%, indicating a balance between optimism and pessimism.

Readings above 70% or below 30% can indicate overbought or oversold market conditions, respectively.

If you use weekly figures, readings above 70% suggest an overbought stock market, while readings below 30% suggest an oversold market.

The actual signal of a potential change in trend takes place when the numbers rise back above 30 or fall back below 70.

AAII vs Intelligence

The AAII Sentiment Survey and the Investors Intelligence Sentiment Index are two distinct market sentiment indicators.

Credit: youtube.com, Comparing and Contrasting the AAII Model Stock Portfolios

The AAII Sentiment Survey has been around since 1987 and focuses on the opinions of individual investors.

This survey asks individuals about their thoughts on where the market is heading in the next six months.

The Investors Intelligence Sentiment Index, on the other hand, focuses on investment advisors and commentators.

These are supposed to be professional analysts and traders who provide insights into market trends.

Bull-Bear Spread

The Bull-Bear Spread is an important indicator of market risk. A large difference between the percentage of bullish and bearish investors can signal increased risk.

The Investors Intelligence Sentiment Survey reports the attitudes of U.S. advisors, and a 30% difference between bullish and bearish is considered increased risk. This means that investors should be cautious and consider defensive measures.

At a 40% difference, it's time to think about protecting your portfolio. The higher the difference, the more risk there is in the market.

Here's a quick reference guide to help you understand the Bull-Bear Spread:

  • 30% difference: Increased risk
  • 40% difference: Consider defensive measures

It's worth noting that a high Bull-Bear Spread can be a sign of market overboughtness, as seen in January 2018 when Peter Boockvar reported the highest bull bear spread since 1986.

Finding and Using the Index

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To find the Investors Intelligence sentiment index, head to the website of Chartcraft, the company that publishes it, and look for the index on their site. You can also subscribe to the plan that suits your needs.

Companies like Chartcraft publish sentiment indexes that provide investors with a running measurement of market conditions.

Statistics and Measurement

The investor intelligence sentiment index is a powerful tool for measuring market sentiment. It provides a quantitative measurement of the market's attitude at a given time.

The index is published by companies like Chartcraft, which compiles investment advisor reports and insider activity to gain a bird's-eye view of the market's overall outlook. This data is then used to create a sentiment index that investors can track over time.

The latest data from Chartcraft's Investors Intelligence sentiment index shows a last value of 25.43% as of January 16, 2025. This is a significant change from the value from last week, which was 34.67%.

Credit: youtube.com, Measuring Market Sentiment: Using Investor Surveys to Gauge Market Trend

Here are some key statistics from the latest data:

The change from last week is a significant -26.65%, indicating a shift in market sentiment. This data can be used by investors to make informed decisions about their investments.

The frequency of the data is weekly, and the unit is percentage. This means that investors can track the changes in market sentiment on a regular basis and adjust their strategies accordingly.

Frequently Asked Questions

What is the best sentiment indicator?

There is no single "best" sentiment indicator, as different indicators serve different purposes and can provide unique insights into market sentiment. The CBOE Volatility Index (VIX) is a popular choice, but it's essential to consider a combination of indicators to get a comprehensive view of market sentiment.

What is the current investor sentiment?

The current US investor sentiment is 40.71% bullish, a slight increase from last week but still below last year's level. This reading is above the long-term average, indicating a moderate level of optimism among investors.

How to gauge investor sentiment?

To gauge investor sentiment, investors often look at the relationship between the 50-day and 200-day moving averages, specifically the "golden cross" when the 50-day MA crosses above the 200-day MA. This crossover can indicate a shift in momentum to the upside, signaling bullish sentiment.

What is the bull bear ratio indicator?

The bull/bear ratio indicator is a weekly measure of market sentiment, tracking the opinions of professional financial advisors. It's a valuable gauge for investors to gauge market trends and make informed decisions.

Tommy Weber

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Tommy Weber is a seasoned Assigning Editor with a keen eye for detail and a passion for storytelling. With extensive experience in assigning articles across various categories, Tommy has honed his skills in identifying and selecting compelling topics that resonate with readers. Tommy's expertise lies in assigning articles related to personal finance, specifically in the areas of bank card credit and bank credit cards.

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