AAII Sentiment Survey: Optimism Creeps Up

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 2.5 percentage points to 21.6%. Bullish sentiment is unusually low and is below its historical average of 37.5% for the 10th time in 12 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 1.4 percentage points to 20.3%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 35th time in 37 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 1.1 percentage points to 58.1%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 16th time in 18 weeks. This is the first time in the history of the survey that bearish sentiment has exceeded 57% for four consecutive weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 3.6 percentage points to –36.5%. The bull-bear spread is below its historical average of 6.5% for the 11th time in 13 weeks.

This week’s special question asked AAII members where they put the odds of a recession occurring before the end of the year.

Here is how they responded:

• A higher-than-typical chance: 50.4%
• Highly likely: 21.7%
• Not more or less likely than I would normally expect: 18.0%
• Unlikely: 9.7%
• Not sure: 0.3%

See more Sentiment Survey results.