AAII Sentiment Survey: Optimism Rebounds as Pessimism Plunges

Optimism among individual investors about the short-term outlook for stocks continues to rebound as pessimism plunged. The latest AAII Sentiment Survey also shows higher neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 4.5 percentage points to 33.1%. Even with the increase, optimism remains below its historical average of 38.0% for the 29th time this year and the 17th time in 18 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 3.8 percentage points to 35.6%. The increase keeps neutral sentiment above its historical average of 31.5% for the 16th time in 17 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, plunged 8.3 percentage points to 31.3%. The historical average is 30.5%.

The change in sentiment is occurring as volatility in stock markets has calmed down. Bullish and neutral sentiment are at their highest levels and bearish sentiment is at its lowest level since July 31, 2019. All three indicators are within their typical ranges.

Many individual investors have been monitoring trade negotiations, particularly between the U.S. and China. Additionally, many AAII members 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: 33.1%, up 4.5 percentage points
• Neutral: 35.6%, up 3.8 percentage points
• Bearish: 31.3%, down 8.3 percentage points

Historical averages:

• Bullish: 38.0%
• Neutral: 31.5%
• 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.