How to Use This as an Investor
The Fear and Greed Index is a contrarian indicator. Warren Buffett's famous advice: "Be fearful when others are greedy, and greedy when others are fearful."
During extreme fear (0-25), stocks are often undervalued and it may be a good time to buy. During extreme greed (75-100), stocks may be overvalued and it may be wise to take some profits or hold off on new purchases.
Never use this as your only decision-making tool. Combine it with fundamental analysis, your asset allocation plan, and your long-term investment strategy.