AAII: The American Association of Individual Investors

AAII Investor Sentiment Survey

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

[

Do you feel the direction of the market over the next six months will be up (bullish), no change (neutral) or down (bearish)?

]

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

Survey Results for Week Ending 4/26/2017

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


HISTORICAL AVERAGE: 38.4%
BULLISH
38.0%
+12.3
Percentage point
change from
last week
HISTORICAL AVERAGE: 31.3%
NEUTRAL
30.2%
-5.3
Percentage point
change from
last week
HISTORICAL AVERAGE: 30.3%
BEARISH
31.7%
-7.0
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:

All three sentiment indicators are now near their historical averages, as optimism rebounded to its highest level in two months while neutral and pessimistic sentiment both fell.

Optimism among individual investors about the short-term direction of stock prices rebounded to its highest level in two months. At the same time, the percentage of investors describing their outlooks as either neutral or pessimistic fell. All three sentiment indicators are now near their historical averages.

Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 12.3 percentage points to 38.0%. This is a two-month high. Even with this week's rise, optimism remains below its historical average of 38.5% for the 14th out of the last 15 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 5.3 percentage points to 30.2%. The drop puts neutral sentiment below its historical average of 31% for the first time in six weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 7.0 percentage points to 31.7%. Though at a five-week low, pessimism continues to be at or above its historical average of 30.5% for the 11th consecutive week and the 14th out of the last 15 weeks.

The big jump in optimism follows what had been an unusually low reading last week (25.7%). Furthermore, not only did large-cap and small-cap stocks rise over the past five trading days, the NASDAQ closed above 6,000 for the first time. The recent upward momentum in stocks may have lessened concerns among some individual investors about stock prices dropping in the very short term.

President Trump's tax plan was unveiled late in this week's survey period. AAII members have previously told us that the potential impact that President Trump could have on the domestic and global economy is a cause of uncertainty and/or concern for some, while a reason to be encouraged for others. (President Trump was again mentioned by several respondents to this week’s special question.) At the same time, prevailing valuations and the lack of downside volatility have increased concern about the potential for a forthcoming drop in stock prices.

This week's special question asked AAII members for their opinion about the current pace of economic growth. Forty percent of respondents described the pace of growth as slow, too slow or sluggish. Several of the respondents believe that the pace of economic growth will accelerate. Slightly more than 15% think that the economy is growing at a steady pace, though some of these respondents described growth as slow but steady. Just 12% described growth in favorable terms. Almost 8% think that the economy is at risk of slowing. Across responses, several respondents mentioned President Trump and the potential impact that his policies may have on the economy.

Here is a sampling of the responses:

  • "Slow and steady."
  • "Right now, I think economic growth is moderate."
  • "Improving, but slow."
  • "Much too slow."
  • "Growth is slow, but may pick up with corporate tax overhaul."

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 »




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