NEW YORK, April 25, 2016 /PRNewswire/ -- Investopedia, the web's premier source of trusted financial content, today launched the Investopedia Anxiety Index ("IAI") that tracks investor sentiment on key investing topics. The IAI monitors a set of terms that typically spike in popularity during times of high market volatility.
In addition to its world-leading financial dictionary, Investopedia creates timely content on a range of financial topics well-suited for investors of every level. With over 20 million unique visitors each month, Investopedia's massive user base provides a wealth of behavioral data that its data science team uses to extrapolate investor concerns.
The IAI, created by Investopedia's team of data and social scientists, tracks user engagement with these topics over time and categorizes them to draw a clear picture of investor sentiment. Peaks in the IAI over the last seven years correspond to some of the biggest instances of market volatility including:
- September 2008: The IAI rose sharply the day of Lehman Brothers collapse.
- May 2011: Index spikes as S&P downgrades U.S. credit rating for the first time.
- July 2015: This spike occurred when the Shanghai index lost about a third of its value before rebounding.
- January 2, 2016: The IAI jumped as Chinese markets crashed to start the year.
- The IAI is currently in the top 25% of tracked investor concern over the last four years.
"One of the first indicators of sentiment is what investors are reading about," comments Investopedia CEO, David Siegel. "By tracking what our 20-million monthly users are researching while on our site, we are able to get one of the first looks at how these investors are viewing the market and what actions they might take."
"We've been able to track terms and topics that routinely spike during times of economic uncertainty and formulate an index that understands trends in overall investor sentiment," adds Investopedia Senior Data Scientist Ronnie Jansson.
The index provides illuminating reference points for investor sentiment such as:
- The IAI has risen 9% since April 2012 representing increasing worry from investors over the last four years
- A 12% drop in the IAI since January 1st suggests investors are recovering from a scary start to the year
- Year-over-year, the index is up 6% indicating investors are more fearful than they were a year ago
- The IAI is currently in the top 25-percentile over the last four years indicating we are still in a state of elevated investor concern.
This launch is the latest update from Investopedia as it continues to create data-backed content that helps every level of the investor community. The IAI provides users with yet another tool they can utilize to better understand the markets and make smarter financial decisions.
Investopedia is the world's leading source of financial content on the web, with more than 20 million unique visitors and 60 million page views each month. Powered by a team of data scientists and financial experts, Investopedia offers timely, sharp insights so everyone from early investors to financial advisors to high net worth individuals can make smarter decisions. Investopedia is an operating business of IAC (NASDAQ: IAC) and part of IAC Publishing, IAC's premium collection of digital publishing brands.