AAII Sentiment Survey: Pessimism Jumps to a 4-Month High

The percentage of individual investors describing their outlook for stocks as bearish is at a four-month high. The latest AAII Sentiment Survey also shows a drop in optimism and a slight decline in neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, plunged 10.1 percentage points to 30.4%. Optimism was last lower on October 9, 2019 (20.3%). The historical average is 38.0%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined by 0.3 percentage points to 30.4%. Neutral sentiment is below its historical average of 31.5% for the sixth time in seven weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, spiked 10.5 percentage points to 39.1%. Pessimism was last higher on October 9, 2019 (44.0%).

Pessimism is near the upper end of its typical range. Readings above 39.8% are unusually high (more than one standard deviation beyond the historical average).

The stock market’s steep drop to start the week combined with news of COVID-19 (coronavirus) spreading led to the shift in sentiment.

This week’s AAII Sentiment Survey results:

• Bullish: 30.4%, down 10.1 percentage points
• Neutral: 30.4%, down 0.3 percentage points
• Bearish: 39.1%, up 10.5 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.