Making Sense of Sentiment Data

Share your perspective and challenges when it comes to interpreting and applying sentiment data to your strategy.

One of the biggest challenges investors face when using sentiment data alongside their fundamental or technical strategies is knowing how to integrate it effectively. You can use sentiment indicators in a few practical ways.

As a self-check: Does sentiment support or challenge your view?
As a guide for size: Is this the kind of market to go big or stay cautious?
As a mood check: Is the crowd more emotional than the market seems to warrant?
As a confidence gauge: If most investors are already bearish, are you late to that view?

For an individual investor, the purpose of sentiment data is to help you understand where the crowd stands, not guess where prices will go; recognize when risk is rising, not rely on buy/sell triggers; and cut through emotional bias, not abandon discipline.

We recently went live with our AAII Sentiment Investing dashboard and newsletter. It not only builds on 35+ years of proprietary AAII Investor Sentiment Survey data but also displays 10+ indicators measuring market sentiment, breadth, valuation, trends and volatility. With the launch of this new platform, we want to ask our investor community two questions:

Share your perspective and challenges when it comes to interpreting and applying sentiment data to your own strategy in the AAII Investor Sentiment Community.

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https://community.aaii.com