Q2 Google Search & Investor Trends

Posted byMikePosted inBehavioral Finance, Coronavirus, Google TrendsTags:, ,

As we closed the 2nd quarter a couple of weeks ago, I wanted to see if the data we initially began tracking in our post A Tale of Two Charts revealed any new clues about investors behavior in relation to the markets as this is our first full quarter filled with pandemic implemented policies.

Some things that we can derive from the charts:

  • There definitely is a “fear of missing out” mentality developing.  April 22 searches for ‘buying stock’ first exceeded ‘stock market crash’ since pandemic started in the United States.  Almost 3 weeks after these queries began to pick up some momentum and do so for the next couple of weeks.
  • Until the Fed selloff of June 15.  That prompted the biggest spike in queries since the pandemic started as investors perceived the dramatic market sell-off on June 15 as an opportunity to play ‘catch-up’ and were more willing to do so on this sell-off than previous ones.
  • Investors really did not perceive the sell-off on June 15 with a fearful lens even though searches for ‘stock market crash’ dramatically spiked this day as well, but more so an opportunistic one, as demonstrated in the minimal movement of the VIX (fear gauge).

What I will be watching in the 3rd Quarter:

  • Does a relapse and subsequent shutdowns cause another market sell-off?  And will investors again continue on shrugging things off, or will their fear overtake them once again?
  • If politics prevails and the upcoming relief bill massively underwhelms the markets and investors, does that lead to a spike in the VIX as well as investor queries of ‘stock market crashes’.
  • If a vaccine is proven successful in the next 60 days…the underlying result on the number of queries to purchase stock/VIX performance/and S&P 500 performance

Disclosure:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

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