AAII Sentiment Survey: Neutral Sentiment Plunges

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 8.3 percentage points to 49.8%. Bullish sentiment is unusually high and is above its historical average of 37.5% for the 53rd time in 54 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 9.1 percentage points to 21.8%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 18th time in 19 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 0.8 percentage points to 28.3%. Bearish sentiment is below its historical average of 31.0% for the 13th time in 14 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 7.5 percentage points to 21.5%. The bull-bear spread is above its historical average of 6.5% for the 27th time in 28 weeks.

This week’s special question asked AAII members how the outcome of U.S. elections is impacting their short-term outlook for stocks.

Here is how they responded:

• It makes me more optimistic: 39.8%
• I’m taking a wait-and-see approach before adjusting my outlook: 22.8%
• It makes me more cautious or pessimistic: 18.3%
• No impact: 16.3%
• Other/not sure: 2.4%

See more Sentiment Survey results.