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 9/28/2016

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


HISTORICAL AVERAGE: 38.5%
BULLISH
24.0%
-0.8
Percentage point
change from
last week
HISTORICAL AVERAGE: 31.0%
NEUTRAL
38.9%
+2.0
Percentage point
change from
last week
HISTORICAL AVERAGE: 30.5%
BEARISH
37.1%
-1.2
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 for a third consecutive week, and remains below its historical average for the 47th consecutive week and the 80th out of the past 82 weeks.

September 29, 2016

The percentage of individual investors expecting stock prices to rise is down for a third consecutive week. Neutral sentiment rose, while pessimism pulled back.

Bullish sentiment, expectations that stock prices will rise over the next six months, declined 0.8 percentage points to 24.0%. Optimism was last lower on June 22, 2016 (22.0%). This is the 47th consecutive week and the 80th out of the past 82 weeks with a bullish sentiment reading below its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 2.0 percentage points to 38.9%. The increase puts neutral sentiment above its historical average of 31.0% for the 35th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 1.2 percentage points to 37.1%. Pessimism is above its historical average of 30.5% for the third consecutive week and the fourth time in five weeks.

This is the sixth consecutive week with fewer than three out of 10 individual investors expressing optimism about the short-term direction of stock prices. It is also the third consecutive week that bullish sentiment is at an unusually low level (more than one standard deviation below average). The typical long-term range for optimism is 28.1% to 48.7%.

The downward volatility that occurred last Friday and Monday likely did not help investor sentiment, as many individual investors fret about the possibility of a sizeable drop occurring. The election is also creating uncertainty among some individual investors. Further adding to pessimism about the short-term direction of stock prices are concerns about valuations, global economic uncertainty and the pace of corporate earnings growth. Giving other individual investors reason for optimism are this summer’s rise in stock prices, 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 for their opinion about how clearly the Federal Reserve is communicating its monetary policy intentions. More than four out of every 10 respondents (44%) are not satisfied with the Fed’s communication about monetary policy. These respondents described it as being unclear, poor, inconsistent or needing improvement.  Not all individual investors feel this way. Approximately 31% of respondents say the Fed is being clear or is doing a good job of communicating its intentions for monetary policy.

Here is a sampling of the responses:

  • “Not very, at least as far as the timing of the increase goes.”
  • “I don’t feel that they are clearly communicating.”
  •  “The Fed appears uncertain as to when they will raise interest rates and I think that is very transparent of them.”
  • “The Fed is doing a good with job communicating monetary policy.”
  • “Sometimes I think the Federal Reserve’s communications are in a state of flux.”

To keep reading »

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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 »