Investment Sentiment in Finance Market

Abstract

Investment emotions are a huge topic in investment finance. Investment emotions influence the entire investment process, from choices to decisions to returns. However, not everyone has a deep understanding of investment sentiment. This article provides detailed information on how to measure investment sentiment and how it affects financial markets. First, some of the indicators that are already available today are systematically described, for example, Commitment of traders, Volatility index, Moving average, etc. We compare the strengths and weaknesses of each indicator. After that, we illustrate the performance of investment sentiment in different financial markets to demonstrate the impact of investment sentiment on financial markets. We present the application of investment sentiment to big data analytics. Finally, we suggest the need to have a big picture view and not blindly listen to financial news and other advice to avoid emotional investing. We conclude that investment sentiment impacts investors' decisions as well as investment returns.