AAII Sentiment Survey: Pessimism Drops

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 5.8 percentage points to 27.4%. Bullish sentiment is unusually low and is below its historical average of 37.5% for the 11th time in 13 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 0.1 percentage points to 20.4%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 36th time in 38 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 6.0 percentage points to 52.2%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 17th time in 19 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 11.8 percentage points to –24.7%. The bull-bear spread is below its historical average of 6.5% for the 12th time in 14 weeks.

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

Here is how they responded:

• It was the right move: 77.3%
• They should have cut rates: 11.6%
• They should have raised rates: 4.2%
• Not sure/no opinion: 6.6%

See more Sentiment Survey results.