State Street Investor Confidence Index

How can we measure investor confidence? Let us count the ways…

Actually, let us not, because there are a bunch. One fan favorite is the “State Street Investor Confidence Index,” which tells us how bearish or bullish investors are feeling based on the amount of risk in their portfolios. Makes sense, right? If we’re feeling a little pessimistic about the strength of the market, we’re probably not going to run out and invest in a bunch of super-risky stuff.

This index isn't based on a survey or anything like that. It’s based on cold, hard data, and that cold, hard data includes how much investors have invested in equities. The more equities investments we see, the more confident investors are, because equities can be a little risky. And we’re not just talking about investors here in the U. S. of A., either. The State Street Investor Confidence Index looks at data from 45 countries around the globe, and they put out their findings every month. On the second-to-last Tuesday of every month, to be precise.

This is a big operation, this index. And apparently it's worth all the fuss: a lot of folks say it's one of the best investor confidence measures out there. So if we’re wondering how investors have been feeling lately, we might want to give this index a look-see.