Wednesday, October 19, 2011

Investor Personality Test at WSJ

Hello, investors.

Thanks to a recent mention on the Wall Street Journal site by Jason Zwieg here (thanks much, by the way) we had a record number of people taking the test. So many infact, that it temporarily crashed our servers. We apologize to anyone who did not get their test results. The test should be up and running now. Thanks to all those who took an interest and completed the assessment. We hope you'll find your results interesting and useful. And please don't hesitate to reach out with any questions you may have.

Happy Investing.

And hey... let's be careful out there.

-Dr. Frankenstocks.

Frank Murtha, Ph.D
Co-founder of MarketPsych

Friday, October 14, 2011

The Fear Index

The MarketPsych Fear Index has remained high despite the recent rally in the S&P 500.  This is actually a very bullish sign for the next couple of months.

Investors "anterior insulas" are still "hot" from the unexpected and relatively traumatic selloffs of August, and as a result, most of those with a hair-trigger panic-sell reflex already exercised their right to sell at the bottom.

You can see the cumulative mutual fund outflows inspired by this fear in the following chart:
While uncertainty and volatility is virtually guaranteed for the next 12 months (pending election, further defaults in Europe, Iranian belligerence, etc...), we're likely to see an equity rally through year-end.

Happy Investing!