AAII Investor Sentiment Survey

Since 1987, AAII members have been answering the same simple question each week:

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The results are compiled into the AAII Investor Sentiment Survey,
which offers insight into the mood of individual investors.

Survey Results for Week Ending 6/22/2016

Data represents what direction members feel the
stock market will be in next 6 months.

Percentage point
change from
last week
Percentage point
change from
last week
Percentage point
change from
last week

Note: Numbers may not add up to 100% because of rounding.

The AAII Investor Sentiment Survey has become a widely followed measure of the mood of individual investors. The weekly survey results are published in financial publications including Barron's and Bloomberg and are widely followed by market strategists, investment newsletter writers and other financial professionals.

AAII Sentiment Survey:

Optimism fell to 22.0%, a four-week low. Since the start of this year, bullish sentiment has only exceeded 30% seven times.

June 23, 2016

The number of individual investors expecting stock prices to rise over the short term is at a four-week low, according to the latest AAII Sentiment Survey. Neutral sentiment rebounded strongly, while pessimism pulled back slightly.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 3.4 percentage points to 22.0%. Optimism was last lower on May 25, 2016 (17.8%).  The drop makes this the eighth time in nine weeks that fewer than three out of 10 survey respondents are optimistic. It is also the 33rd consecutive week and the 66th out of the past 68 weeks with bullish sentiment below its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded by 5.7 percentage points to 42.8%. The rise follows last week's four-month low. The increase keeps neutral sentiment above its historical average of 31.0% for the 21st consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 2.3 percentage points to 35.2%. The drop follows last week's four-month high, but is small enough to keep pessimism above its historical average of 30.5% on consecutive weeks for just the second time since February.

Uncertainty and lack of optimism continue to be trends suggested by our weekly survey. More than four out of 10 individual investors have described their short-term market outlook as "neutral" during 14 out of the first 25 weeks of this year. (Neutral sentiment readings above 40% are unusually high, meaning more than one standard deviation above the long-term average.) At the same time, optimism has only exceeded 30% just seven times this year.

Giving individual investors cause for concern is the slow pace of U.S. economic growth and uncertain pace of global economic growth, terrorism and global unrest, lackluster corporate earnings, the prevailing level of valuations, the forthcoming November elections and monetary policy. Some AAII members, however, are encouraged by sustained domestic economic growth, corporate earnings and the proximity of stock prices to their record highs.

This week’s special question asked AAII members whether the Federal Open Market Committee was correct in keeping interest rates unchanged at its June meeting. More than half of respondents (56%) said the Fed was correct not to raise rates. Slow domestic economic growth and global uncertainty—including today’s Brexit vote—were the primary reasons given why. About one-third of respondents (34%) disagreed, saying the Fed should have raised rates. Many of these members think rates should be moved back to more normal levels and/or that ongoing monetary policy is hurting savers.

Here is a sampling of the responses:

  • “They are correct because the economy is fragile and the rates increases will slow down everything.”
  • “They are right because of world conditions and uncertainty.”
  • “Even a small increase, like 0.25%, is better than getting nothing on money market accounts.”
  • “Incorrect. They should have normalized rates long ago.”
  • “No change is correct now, but the Fed erred in failing to raise rates 18 months ago.”

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How to Use the AAII Sentiment Survey as a Gauge of Future Market Direction

Over the years, AAII analysts have examined the weekly results and have tried to give some perspective to the data. These articles are the results of some of this analysis.

Analyzing the AAII Sentiment Survey Without Hindsight »
Using the AAII Sentiment Survey as a Contrarian Indicator »