AAII Investor Sentiment Survey

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Since 1987, AAII members have been answering the same simple question each week. The results are compiled into the AAII Investor Sentiment Survey,
which offers insight into the mood of individual investors.

Survey Results for Week Ending 10/19/2016

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:

Pessimism rebounded, and is now above its historical average for five out of the past seven weeks.

October 13, 2016

Pessimism among individual investors about stock prices dropping rebounded in the latest AAII Sentiment Survey. The rise in bearish sentiment occurred as both bullish sentiment and neutral sentiment fell.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 3.3 percentage points to 25.5%. The drop puts optimism below its historical average of 38.5% for the 49th consecutive week and the 82nd out of the past 84 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 2.5 percentage points to 40.8%. Even with the drop, neutral sentiment remains above its historical average of 31.0% for the 37th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 5.8 percentage points to 33.7%. The increase puts pessimism above its historical average of 30.5% for the fifth time in seven weeks.

Pessimism has largely stayed above its historical average since the end of August. Though higher than the levels seen in July and most of August, pessimism has stayed within its typical historical range. Optimism is currently at an unusually low level, and has been for four out of the past five weeks.

Causing concern for some investors is the possibility of the stock market experiencing a larger drop than what occurred in mid-September, valuations, the November elections, global economic uncertainty and the pace of corporate earnings growth. Giving other individual investors reason for optimism are the perceived lack of investment alternatives, corporate earnings, low/stable energy prices and sustained, albeit slow, economic growth.

This week’s special question asked AAII members what sectors, if any, they think are overvalued right now. Technology (10% of respondents), dividend payers (9%) and utilities (8%) were the most-listed sectors and segments. (Some respondents listed more than one sector.) Nearly 15% of respondents said that either all or most sectors are currently overvalued, but almost 18% said that no sectors are currently overvalued.

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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 »