AAII Sentiment Survey: Optimism Bumps 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 6.8 percentage points to 28.5%. Bullish sentiment is below its historical average of 37.5% for the 13th time in 15 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 3.8 percentage points to 12.5%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 38th time in 40 weeks. Neutral sentiment was last lower on May 28, 2009, (11.0%) and was the 14th-lowest reading in the survey’s history.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 3.0 percentage points to 58.9%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 19th time in 21 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 9.7 percentage points to –30.4%. The bull-bear spread is below its historical average of 6.5% for the 14th time in 16 weeks.

This week’s special question asked AAII members how they would describe the current valuation of stocks.

Here is how they responded:

• Stocks, in general, are overvalued: 29.2%
• Stocks, in general, are fairly valued: 13.0%
• Valuations are mixed, with some stocks expensive and other cheap: 36.4%
• Stocks, in general, are undervalued: 14.5%
• Not sure/no opinion: 6.9%

See more Sentiment Survey results.