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 8/24/2016

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


HISTORICAL AVERAGE: 38.5%
BULLISH
29.4%
-6.1
Percentage point
change from
last week
HISTORICAL AVERAGE: 31.0%
NEUTRAL
40.9%
+2.9
Percentage point
change from
last week
HISTORICAL AVERAGE: 30.5%
BEARISH
29.6%
+3.3
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 is at a five-week high, as more than one out of three respondents described themselves as bullish for just the sixth time this year.

August 18, 2016

Optimism about the six-month direction of stock prices is at a five-week high in the latest AAII Sentiment Survey. Neutral sentiment fell and pessimism is slightly lower.

Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 4.3 percentage points to 35.6%. Optimism was last higher on July 13, 2016 (36.9%). The increase is not large enough to prevent bullish sentiment from staying below its historical average of 38.5% for the 41st consecutive week and the 74th out of the past 76 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 3.9 percentage points to 38.1%. Neutral sentiment was last lower on June 29, 2016 (37.7%). Even with the decline, neutral sentiment is above its historical average of 31.0% for the 29th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 0.4 percentage points to 26.4%. This is the seventh consecutive week that pessimism is below its historical average of 30.5%. It is also the fifth time in seven weeks that bearish sentiment has been within a 0.3-percentage-point range.

The improvement in sentiment is occurring as the large-cap indexes continue to trade at or near record highs and small-cap stocks are experiencing upward momentum. Most individual investors are keeping their outlook tempered, however. This week is just the sixth in this calendar year with more than one out of three survey respondents describing themselves as being bullish about the six-month direction of stock prices. Optimism has not been above its historical average of 38.5% since November 4, 2015, when it registered 39.0%.

This summer's upward movement in stock prices, the perceived lack of investment alternatives and sustained, albeit slow, economic growth are giving some individual investors reason to be optimistic. Causes for concern are prevailing valuations, the presidential election, global economic uncertainty (including Brexit) and disappointment with corporate earnings growth.

This week's special question asked AAII members for their opinion on the current pace of economic growth. More than one of three respondents (36%) describe economic growth as slow, weak or anemic. An additional 16% say economic growth is too slow and 10% say growth is disappointing or otherwise unacceptable. Just 6% said they are encouraged by the pace of growth or otherwise describe the economy as growing.

Here is a sampling of the responses:

  • "Economic growth is growing at an unacceptable pace."
  • "It's slower than I'd like, but at least it's going in the right direction generally."
  • "It is anemic for far too long; changes are needed on multiple fronts."
  • "Slow but steady."
  • "Slow and sluggish and likely to stay that way for some time."

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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 »