Based on the investor sentiment survey responses we received last week, we have constructed a Fear vs. Greed index. The methodology used for the index construction is to assign points to each response ranging from 0 (fear) to 5 (greed). We then compiled the points and rebased them to 100. The result is displayed in the chart above.
Investors that participated in the survey seem to be balanced between fear and greed with a slight tilt towards fear. Nearly 86.6% of investors think that the market has not bottomed out yet. Sentiment is quite mixed from very fearful to opportunistic buying, but only around 1% feel like aggressive buyers. Only 26% believe that the Fed’s stimulus package is sufficient to support a recovery, 46% believe it will not, and the rest are uncertain. If forced to invest now, stocks and corporate bonds would get the highest priority followed closely by gold. Within the bond space, sovereigns and investment grade corporates take the pick with roughly 34% and 37% respectively.