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 8/31/2016

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


HISTORICAL AVERAGE: 38.5%
BULLISH
28.6%
-0.8
Percentage point
change from
last week
HISTORICAL AVERAGE: 31.0%
NEUTRAL
39.9%
-1.1
Percentage point
change from
last week
HISTORICAL AVERAGE: 30.5%
BEARISH
31.5%
+1.9
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 rose to a two-month high as optimism fell from what had been a five-week high.

August 25, 2016

Pessimism among individual investors about the short-term direction of stock prices is at a two-month high in the latest AAII Sentiment Survey. Optimism fell to back below 30%, while neutral sentiment rebounded modestly.

Bullish sentiment, expectations that stock prices will rise over the next six months, plunged 6.1 percentage points to 29.4%. Optimism was last lower on June 29, 2016. This is the 75th week out of the past 77 that optimism is below its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded by 2.9 percentage points to 40.9%. The rebound puts neutral sentiment above 40% for the fourth time in five weeks. It also keeps neutral sentiment above its historical average of 31.0% for the 30th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 3.3 percentage points to 29.6%. This is the highest reading of pessimism since June 29, 2016 (33.4%). The increase is not large enough to prevent bearish sentiment from staying below its historical average of 30.5% for the eighth consecutive week, however.

This week's decline in optimism follows what had been a five-week high. Meanwhile, pessimism rose from what had been a five-week low. Though the major U.S. indexes were relatively unchanged over the past seven days, concerns about valuations and the presidential election continue to temper individual investors' expectations. Also keeping some individual investors bearish or at least giving them reason to be cautious are global economic uncertainty and disappointment with corporate earnings growth. Giving other individual investors reason for optimism are this summer’s upward movement in stock prices, the perceived lack of investment alternatives, corporate earnings and sustained, albeit slow, economic growth.

This week’s special question asked AAII members how second-quarter earnings have influenced their outlook for stock prices. More than four out of 10 respondents (41%) said that quarterly corporate profits have not altered their outlook. Reasons were mixed, though some said the presidential election is having more influence, while others said short-term results do not alter their long-term outlook. Slightly more than 17% said that second-quarter earnings had a positive influence on their outlook for stock prices. About 13% described themselves as being more cautious or are otherwise pessimistic about the direction of stock prices following second-quarter earnings season.

Here is a sampling of the responses:

  • “Not earnings, the election!”
  • “Looks like lipstick on a pig for the most part. Meeting lowered expectations is not a plus.”
  • “My outlook was for very slow growth, so earnings have done nothing to change my mind.”
  • “I expected slightly lower earnings overall, but for specific stocks, earnings seem to be inconsistent.”
  • “Earnings have been better than expected, which caused me to reassess my position from bearish to neutral.”

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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 »