The three-point improvement in the indicator is all down to the fickle sunshine factor, which performed well in January. This isn't as unusual as it sounds - the sunshine anomaly figures always show positive returns in January with February underperforming. According to the Met Office, sunshine was well above normal for most of the UK during the month - indeed, this was provisionally the fourth-sunniest January since 1929.
| Month | Score |
| November | -33 |
| December | -33 |
| January | -30 |
But we are still deep in negative territory. It isn't just our Index that makes for gloomy reading. The State Street Global Markets investor confidence index for the world fell 2.1 points in January and in Europe it fell 10.1 points as institutional investors reallocated away from core equity positions.
Marcus Grubb, Managing Director, Investment at the World Gold Council comments: "These findings suggest that the market volatility caused by the ongoing economic turmoil continues to have a destabilising effect on investors, testing their resolve and fuelling the search for assets that offer downside protection and wealth preservation."
The remainder of the factors for the Investors Chronicle's confidence Index remain low - and unchanged.
HOW DOES THE INDEX WORK?
The IC's Confidence Index is the first of its kind to take into account stock market, economic and general 'feel-good' factors. It is calculated using 10 factors, split into four categories:
■ Prices (RPI, oil price);
■ Rates (interest rate levels, unemployment figures);
■ Stock market (UK new share issues and rising shares, and the level of the Dow Jones index);
■ 'Feel-good' (wages, house prices, the sunshine anomaly)
UK indices such as the FTSE 100 have been excluded from the components, but the Dow Jones is included because of its global influence. As for the sunshine factor, it's a proven fact that people feel better when the sun is shining - and this can even influence investment habits. Each factor is separately allotted a score from +5 to -5. The sum of these scores gives the Investors Chronicle Confidence Index level, on a scale from -50 to +50.
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