AAII Sentiment Survey: Pessimism Rises

Pessimism among individual investors about the short-term outlook for stocks significantly increased in the latest AAII Sentiment Survey. Meanwhile, both optimism and neutral sentiment decreased.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 2.7 percentage points to 43.2%. Bullish sentiment is above its historical average of 37.5% for the 20th consecutive week. 

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 2.6 percentage points to 29.6%. Neutral sentiment is below its historical average of 31.5% for the sixth time in eight weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 5.3 percentage points to 27.2%. Bearish sentiment is below its historical average of 31.0% for the 20th consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 8.0 percentage points to 16.0%. The bull-bear spread is above its historical average of 6.5% for the 20th consecutive week.

This week’s special question asked AAII members about the Federal Reserve’s decision to keep interest rates unchanged.

Here is how they responded:

• It was the right decision: 76.6%
• They should have raised rates: 11.2%
• They should have cut rates: 5.6%
• Not sure/no opinion: 6.3%

This week’s Sentiment Survey results:

• Bullish: 43.2%, down 2.7 percentage points
• Neutral: 29.6%, down 2.6 percentage points
• Bearish: 27.2%, up 5.3 percentage points

Historical averages:

• Bullish: 37.5%
• Neutral: 31.5%
• Bearish: 31.0%

See more Sentiment Survey results.