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State Street finds confidence slipping
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Tue, Nov 23, 2004
Source UPI
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BOSTON -- State Street Global Markets of Boston, Mass., said Tuesday its confidence index slipped in November. State Street Global Markets said investor confidence declined 3.9 points in November to 85.3, erasing the prior month's gain and returning to summer levels.
State Street is the investment research arm of State Street Corp. The index measures confidence by looking at actual levels of risk in investment portfolios. This is not an attitude survey. The investor confidence index is compiled with techniques based on modern portfolio theory. According to State Street, "the more of their portfolios that professional investors are willing to devote to riskier as opposed to safer investments, the greater their risk appetite or confidence." So when investors choose to increase their holdings of risky assets, this confirms their confidence has increased. The report said worries over the "unbalanced nature" of the global recovery, that is worries over the value of the dollar, have replaced prior worries on overall growth and high oil prices. The report said European investors are worried that the high euro will hurt growth. Copyright 2004 by United Press International
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