Say anything you want about me if you spell my name right: the effect of Internet searches on financial market

In this paper, we focus on the influence of attention from investors on the dynamics of different financial assets. Investor attention is measured by the number of Google searches for three types of assets: stocks, gold and cryptocurrencies. We analyse the daily price of: the Standard & Poor's 500 (S&P 500), the Russell 2000 Index (RUT), Bitcoin and the gold spot price in USD. The study covers a period of 5 years: 2013-2018. According to the results, the prices of different assets react differently to changes in the level of investor attention (and vice versa), and this relationship changes over time. Bitcoin seems to be the most sensitive to the changes in investor attention and changes in its dynamics appear to influence investor attention the most. Changes in the volatility and trade volume of stocks occur simultaneously with changes in investor interest. However, during periods of increased stock volatility, we can observe increased investor interest in gold over any other asset. The price of gold itself has proven itself to be most immune to changes in investor attention.

Automated summary

This study focuses on the impact of investor attention on the dynamics of various financial assets, such as stocks, gold, and cryptocurrencies, as measured by Google searches. Results indicate that different assets react differently to changes in investor attention, with Bitcoin being the most sensitive and gold being the most immune. The relationship between investor attention and asset prices changes over time, with Bitcoin dynamics having the most significant influence on investor attention.