<\/a><\/p>\n

The 2008 crash reminded investors that \u2013 like us during the holiday season \u2013 the financial system can also crash under stress.<\/p>\n

But how can something as intangible as stress in the financial system be measured?<\/p>\n

The St. Louis Federal Reserve answered this question by creating an index called the \u201cFinancial Stress Index\u201d that tracks the \u201cflight to quality\u201d that happens when investors sense trouble brewing in our global financial system.<\/p>\n

Similar to how children jump under a blanket when they\u2019re scared, investors move their money to specific types of investments when higher yield-producing investments (especially stocks) struggle.<\/p>\n

The Kansas City Federal Reserve also created a Financial Stress Index.\u00a0 However, the St. Louis version covers a broader range of global indicators and gives arguably a better picture of broad financial system stress.<\/p>\n

Comparing \u00a0St. Louis\u2019 Financial Stress Index (in blue) to the S&P 500 shows how movement in the financial stress index slightly precedes movement in the S&P 500:<\/p>\n

<\/a><\/p>\n

The next time you\u2019re curious about the stress in the market, check out the financial stress index.\u00a0 And if you\u2019re exceptionally concerned\u2014just like life\u2014talk to a professional.<\/p>\n","protected":false},"excerpt":{"rendered":"

The 2008 crash reminded investors that \u2013 like us during the holiday season \u2013 the financial system can also crash under stress. But how can something as intangible as stress in the financial system […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[30],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2252"}],"collection":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/comments?post=2252"}],"version-history":[{"count":4,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2252\/revisions"}],"predecessor-version":[{"id":2258,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/posts\/2252\/revisions\/2258"}],"wp:attachment":[{"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/media?parent=2252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/categories?post=2252"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.pricecapitalcorp.com\/wp-json\/wp\/v2\/tags?post=2252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}