A TAIEX forecasting model based on changes of keyword search volume on Google Trends

In this study, we used the Google Trends as a prediction tool to predict the investors´ behavior and its impact on stock market. In the behavior and social perspective, more and more Internet users use Google Trends as the search engine to surf on the websites every day. Therefore, these search actions can be seen as personal votes because Internet users often search items they are interested in. Based on this motivation, this study wanted to investigate the relationship between Internet search and Taiwan Stock Exchange Weighted Index. Finally, this study provides the investors a different approach from fundamental analysis and technical analysis. It offers a more understandable reference standard to investors new to the stock market. For investors who are good at fundamental analysis and technical analysis, it can be also used as a reference subject.