What is a Speculation Index?
How Does a Speculation Index Work?
The AMEX tends to list riskier stocks issued by smaller companies that are starting up or are trying to grow. By comparing volume on the AMEX versus that on the NYSE (which tends to list larger, well-established companies), the speculation index can provide insight into how much risk investors are taking on. In this respect, higher ratios are associated with higher levels of speculation, whereas lower ratios generally indicate that investors wish to stay with lower-risk investments.
Why Does a Speculation Index Matter?
Speculative investment occurs at collectively high levels when there is a generally bullish market sentiment. For this reason, when the speculation index reaches unusually high levels, many analysts and investors believe that it signals the end of an upward trend.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
It's never fun to think about death -- especially your own. But we all die, and when we do, we want our loved ones to benefit from our legacy. Yet it's scary to think that...Read More →
Parents, imagine this scenario: You're at home on a leisurely Saturday afternoon enjoying the peace and quiet of an empty house, when, suddenly, you receive an alert on your smart phone. It...Read More →