Google tells the tale of individual investors and stocks
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