AAII Sentiment Survey: Optimism Rebounds but Remains Unusually Low

Optimism among individual investors for stocks to advance over the next six months remains at an unusually low level despite rebounding this week. The latest AAII Sentiment Survey also shows pessimism staying at an unusually high level.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 1.5 percentage points to 23.2%. Optimism remains below its historical average of 38.5% for the 25th time this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.8 percentage points to 32.0%. The increase puts neutral sentiment back above its historical average of 31.0% for the 12th time in 13 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 3.3 percentage points to 44.8%. Pessimism is above its historical average of 30.5% for the 11th time in 14 weeks.

As noted above, bullish sentiment remains at an unusually low level and bearish sentiment remains at an unusually high level for the second consecutive week. Historically, the S&P 500 index has experienced above-average and above-median returns during the six- and 12-month periods following unusually low readings.

The survey period runs from Thursday through Wednesday. Reminders to take the survey are sent out every Monday.

Many individual investors have been monitoring trade negotiations, particularly between the U.S. and China. Though the implementation of new tariffs on Chinese goods has been postponed, the market’s ongoing volatility is having an effect. Additionally, a separate survey we recently conducted among AAII members found that 48% expect a recession to start within the next 12 to 24 months.

Also having an influence on sentiment are Washington politics, geopolitics, valuations, corporate earnings, monetary policy and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 23.2%, up 1.5 percentage points
• Neutral: 32.0%, up 1.8 percentage points
• Bearish: 44.8%, down 3.3 percentage points

Historical averages:

• Bullish: 38.5%
• Neutral: 31.0%
• Bearish: 30.5%

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/sentimentsurvey.

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See more Sentiment Survey results.