Google tells the tale of individual investors and stocks

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Individual investors have grown disenchanted with stocks. Want proof? Google it.

To gauge small-investor sentiment toward the market, a Wall Street researcher tracked how often people perform searches for various investment-related words.

Nicholas Colas, chief market strategist at ConvergEx Group in New York, used Google Trends, a portion of the popular website that measures search patterns over time.

Terms such as “investing” and “stock investing,” hot topics among small investors during the dot-com craze a decade ago, have fallen sharply in the last seven years, according to Colas. Even “bonds” has fallen from grace since 2004.

And the stock-market rally over the last two years has done surprisingly little to stoke interest -- perhaps because people are still nursing their wounds and remain wary of the economy.

“You’d be hard-pressed to point out any incremental interest in ‘investing’ despite the move higher for equities,” Colas wrote in a report to clients. “Market rallies, even those that go on for years, are not enough to engage them.”

The most popular investment-related term? Not surprising, it’s “saving,” with 6.1 million searches a month. That easily tops 823,000 for “investing” and a mere 60,500 for “stock investing.”

The rally in emerging markets two years ago produced a dash of excitement for “foreign stock.” But it didn’t last long and now generates only 12,100 searches a month.

“Bankruptcy” tied for the second-most popular term that Colas searched. But after hitting a peak in 2009, searches for “bankruptcy” have declined this year from their 2010 level.

That’s “the most heartening trend, both from a human as well as financial standpoint,” Colas wrote.

-- Walter Hamilton