AAII Sentiment Survey: Optimism Rebounds

Optimism among individual investors about the six-month outlook for stocks rebounded but remains below 30% in the latest AAII Sentiment Survey. Pessimism pulled back, while neutral sentiment is nearly unchanged.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 5.7 percentage points to 29.0%. Bullish sentiment is below its historical average of 38.0% for the 11th consecutive week and the 16th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined by a slight 0.1 percentage points to 26.0%. Neutral sentiment remains below its historical average of 31.5% for the 14th consecutive week and the 18th time in 19 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 5.6 percentage points to 45.0%. Pessimism is above its historical average of 30.5% for the 13th consecutive week.

Pessimism is at an unusually high level for the 11th consecutive week. Optimism is back within its typical historical range.

The continued high level of pessimism reflects the coronavirus pandemic and concerns about the economy. However, some AAII members have been encouraged by the rebound in the stock market from its March lows. Many—but not all—have also told us that they have used the downturn to look for buying opportunities among stocks (see this month’s AAII Journal for more). Other factors influencing AAII members’ sentiment include the upcoming November U.S. presidential election, corporate earnings and valuations.

This week’s AAII Sentiment Survey results:

• Bullish: 29.0%, up 5.7 percentage points
• Neutral: 26.0%, down 0.1 percentage points
• Bearish: 45.0%, down 5.6 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.