Barron's Confidence Index

Barron's confidence index

Index measuring the ratio of the average yield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. The discrepancy between high-rated top-grade bonds and low-rated bond yields establishes a measure that is indicative of investor confidence.

---

Barron's Confidence Index

A measure of how bullish or bearish a market is. To calculate the Index, one divides the average yield of high risk bonds by the average yield of medium risk bonds. A high Index figure indicates a bullish market because investors are willing to accept lower returns for higher levels of risk. A low figure indicates the opposite.

---

Barron's Confidence Index

A confidence indicator calculated by dividing the yield on intermediate-grade bonds into the yield on high-grade bonds. A rising ratio indicates investors are demanding a lower premium in yield for increased risk, thus expressing confidence in the economy and the securities markets. A rising index is considered bullish for stocks; a falling index is considered bearish for stocks. Compare Standard & Poor's Confidence Indicator.