Investor-reported fear and market-priced fear told different stories this month. AAII bearish sentiment reached 53.3 percent for the week ending September 16, a sixteen-month high, while the VIX, which spiked to 17.84 during the Hormuz tanker exchanges on September 10, eased back to 14.81 by September 18. Kahneman and Tversky described this mechanism in 1974 as the availability heuristic, where vivid recent events outweigh actual base rates. The gap between what investors report and what options markets are pricing is itself the more useful conversation with clients this week.
This chart is presented for general informational purposes only and does not constitute financial, investment, tax, or legal advice. Figures reflect the source and period indicated and may no longer be current.
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