Filtering investor actions and sentiment

Stocktwits does a great job at filtering day traders and technical analysis. They are slowly adding more insights into fundamental analysis and the new sentiment feature adds an amazing amount of insight into what active investors are thinking and doing. What is interesting though is that most of the capital in the markets is not managed as actively as the traders on stocktwits. The average investor, fund manager, etc. is not watching the price of stocks tick up and down on average. Most of the capital in the economy moves slow by HFT standards. So I’ve been thinking a lot more lately about how to capture that information in a more meaningful way.

I have been reading a lot of institutional investment reports like the latest one from Blackrock. There seems to be a lot of positive retail sentiment and the interesting part is the mention that there won’t be a change. To me this indicates retail investors are not in the bubble mindset, this indicates that retail investors are happy with the money they have in the market, but don’t see any reason to exuberantly add to that bullish position… in other words, we’re not in the greed/bubble stage yet but are in the bull market stage still.

While affluent investors (those with more than $250,000 in investable assets) expressed
greater confidence about their financial futures, even they – along with investors of all types
around the world – tend to hold a lot of cash, with no immediate plans to change their
investment mix. In the U.S., investors of all types held 48% of investable assets in cash, with
18% in stocks and 7% in bonds. Equity ownership rates are highest in Hong Kong and
Taiwan, countries that also have high overall rates of household savings.

There is lots of interesting data in the report, here is another mention, where 58% of people in the entire world who are working with a financial advisor are happy with where things are going. Head in the sand happy to watch their market positions increase at whatever pace the market grows at. No reason to add or remove capital in some irrational manner…

Notably, 58% of people who worked with a financial advisor—whether affluent or not—
reported feeling positive about their financial future. Affluent investors were more upbeat,
with 72% describing themselves as positive, 78% saying they felt in control of their financial
futures, and 81% saying they were confident that they were making the right savings and
investment decisions.

Here is the full report from BlackRock…

BlackRock Global Investor Pulse Core Release

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