AAII Sentiment Survey: Pessimism Falls to an Eight-Month Low

The percentage of individual investors describing their short-term outlook as “bearish” is at an eight-month low in the latest AAII Sentiment Survey. Optimism remained flat, while neutral sentiment rose.

Bullish sentiment, expectations that stock prices will rise over the next six months, is unchanged at 34.8%. Bullish sentiment remains below its historical average of 38.0% for the 32nd consecutive week and the 37th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded 3.2 percentage points to 29.5%. This is the 38th time out of the past 40 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 3.2 percentage points to 35.7%. Pessimism was last lower on February 19, 2020 (28.7%). Nonetheless, bearish sentiment is above its historical average of 30.5% for the 34th consecutive week and the 36th time this year.

The pullback in bearish sentiment keeps it within its typical historical range (a reading below 40.2%) for just the third time in 18 weeks. Both bullish and neutral sentiment are also within their typical ranges.

Optimism continues to be below average while pessimism continues to be above average. This differential reflects ongoing concerns about the coronavirus pandemic, the economy and the upcoming election. Other factors influencing AAII members’ sentiment include valuations and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 34.8%, no change
• Neutral: 29.5%, up 3.2 percentage points
• Bearish: 35.7%, down 3.2 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.