AAII Sentiment Survey: Neutral Sentiment Rises to a 9-Week High

The percentage of individual investors describing their six-month outlook for stocks as “neutral” is at a nine-week high. The latest AAII Sentiment Survey also shows an increase in optimism and a decline in pessimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded 1.3 percentage points to 26.2%. Bullish sentiment remains below its historical average of 38.0% for the 30th consecutive week and the 35th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.6 percentage points to 30.7%. This is the 36th time out of the past 38 weeks that neutral sentiment is below its historical average of 31.5%.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased by 2.9 percentage points to 43.1%. Bearish sentiment is above its historical average of 30.5% for the 32nd consecutive week and the 34th time this year.

Optimism is at an unusually low level (more than one standard deviation below its historical average) for the third time in four weeks. Pessimism is continuing its streak of unusually high readings.

The persisting high level of pessimism reflects concerns about the coronavirus pandemic, the economy and the upcoming election. September’s decline in the Nasdaq composite may have also played a role. Other factors influencing AAII members’ sentiment include the economy, valuations and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 26.2%, up 1.3 percentage points
• Neutral: 30.7%, up 1.6 percentage points
• Bearish: 43.1%, down 2.9 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.