AAII Sentiment Survey: Optimism Pulls Back as Pessimism Rises

Optimism among individual investors about the short-term outlook for stocks declined modestly as pessimism rebounded. The latest AAII Sentiment Survey also shows lower neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, declined 0.5 percentage points to 35.3%. Bullish sentiment remains below its historical average of 38.0% for the 34th consecutive week and the 39th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 1.8 percentage points to 29.4%. Neutral sentiment is below its historical average of 31.5% for the 40th time out of the past 42 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 2.3 percentage points to 35.3%. Bearish sentiment remains above its historical average of 30.5% for the 36th consecutive week and the 38th time this year.

This is the first time bullish and bearish sentiment are tied since January 30, 2019 (31.8% each). At current levels, all three indicators are 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: 35.3%, down 0.5 percentage points
• Neutral: 29.4%, down 1.8 percentage points
• Bearish: 35.3%, up 2.3 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.