AAII Sentiment Survey: Optimism Ends Streak of Below-Average Readings

Individual investor optimism about the short-term direction of the stock market is at its average level, ending a long streak of below-average readings. Additionally, the latest AAII Sentiment Survey shows pessimism falling to an eight-month low.

Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded 2.7 percentage points to 38.0%. Optimism was last higher on March 4, 2020 (38.7%). Prior to this week’s reading, bullish sentiment had been below its historical average of 38.0% for 34 consecutive weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded by 1.1 percentage points to 30.6%. Neutral sentiment is below its historical average of 31.5% for the 41st time out of the past 43 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 3.8 percentage points to 31.5%. Pessimism was last lower on February 19, 2020 (28.7%). Bearish sentiment remains above its historical average of 30.5% for the 37th consecutive week and the 39th time this year.

At current levels, all three indicators are within their typical ranges.

Optimism was comparatively higher throughout October relative to what we saw in late spring and throughout the summer. Though it’s very early, November appears to be continuing the recent trend. Nonetheless, AAII members have expressed concerns about the election, the coronavirus pandemic and the economy. Other factors influencing AAII members’ sentiment include valuations and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 38.0%, up 2.7 percentage points
• Neutral: 30.6%, up 1.1 percentage points
• Bearish: 31.5%, down 3.8 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.

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership

See more Sentiment Survey results.