AAII Sentiment Survey: Optimism Continues to Improve

Optimism among individual investors about the short-term direction of the stock market improved for the third consecutive week. The latest AAII Sentiment Survey also shows a modest increase in neutral sentiment and a drop in pessimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 2.2 percentage points to 35.3%. Even with the increase, optimism remains below its historical average of 38.0% for the 30th time this year and the 18th time in 19 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 1.2 percentage points to 36.8%. Neutral sentiment is above its historical average of 31.5% for the 17th time in 18 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 3.4 percentage points to 27.8%. Pessimism is below its historical average of 30.5% for the first time in seven weeks.

The continued improvement in optimism and decrease in pessimism is occurring as volatility in stock markets has calmed down from last month. Bullish and neutral sentiment continue to be at their highest levels and bearish sentiment is at its lowest level since July 31, 2019. All three indicators are currently 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: 35.3%, up 2.2 percentage points
• Neutral: 36.8%, up 1.2 percentage points
• Bearish: 27.8%, down 3.4 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.

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership

See more Sentiment Survey results.