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 9/21/2016

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 rose to its highest level since February, but still remains within its typical historical range

September 22, 2016

The percentage of individual investors expressing pessimism about the short-term direction of the stock market is at its highest level since February. This week's AAII Sentiment Survey also shows a slight increase in neutral sentiment and a further decline in optimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 3.1 percentage points to 24.8%. The drop keeps optimism at its lowest level since June 22, 2016 (22.0%). It also keeps bullish sentiment below its historical average of 38.5% for the 79th week out of the past 81.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, edged up 0.7 percentage points to 36.9%. The increase puts neutral sentiment above its historical average of 31.0% for the 34th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 2.4 percentage points to 38.3%. Pessimism was last higher on February 10, 2016 (48.7%). Bearish sentiment is still within its typical historical range, though it’s above its historical average of 30.5% for the third time in four weeks.

During the past two weeks, pessimism has jumped by a cumulative 9.8 percentage points, while optimism has fallen by a cumulative 5.0 percentage points. Concerns continue to exist about a potentially larger drop in stock prices than occurred earlier in the month. It is also not completely clear how much influence the upcoming election is having on sentiment, though it is mentioned regularly without any prompt from us in response to the survey's weekly special question.

The survey period runs from Thursday through Wednesday. As such, the majority of this week's survey responses were recorded before yesterday's Federal Reserve statement and yesterday's new record high for the NASDAQ. (AAII members have previously expressed mixed opinions about the new record highs established by the major indexes this summer.)

In addition to worries about a potential larger drop in stock prices, some AAII members have previously expressed concern 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 how, if at all, oil prices are affecting their outlook for the stock market in general. Just under half of all respondents (46%) said oil prices are not influencing their outlook for stocks. Some said the presidential election is having a greater impact on their sentiment. Approximately 11% of all respondents view low oil prices as being good for the economy, and thereby the market. Slightly more than 8% viewed low oil prices as being negative, with some saying the lower prices reflect weak economic conditions.

Here is a sampling of the responses:

  • "Not impacting my outlook, unless oil starts moving up or down."
  • "Continuing low oil prices are good for consumers and most businesses, so I expect a positive impact on stock prices."
  • "I'll be concerned if oil prices drop or rise considerably."
  • "Oil prices have some impact, but I believe the upcoming election has more impact."
  • "Low oil prices continue to indicate weak global demand in the coming months."

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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 »