AAII Sentiment Survey: Pessimism Retracts

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 0.8 percentage points to 29.2%. Bullish sentiment is below its historical average of 37.5% for the sixth time in eight weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 6.0 percentage points to 30.3%. Neutral sentiment is below its historical average of 31.5% for the 31st time in 33 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 6.8 percentage points to 40.5%. Bearish sentiment is above its historical average of 31.0% for the 12th time in 14 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 7.6 percentage points to –11.3%. The bull-bear spread is below its historical average of 6.5% for the seventh time in nine weeks.

This week’s special question asked AAII members which factor is most influencing their six-month outlook for stocks.

Here is how they responded:

• The economy and/or inflation: 46.0%
• Valuations: 13.3%
• Corporate earnings: 11.6%
• Monetary policy/interest rates: 11.3%
• Other: 17.9%

See more Sentiment Survey results.