AAII Sentiment Survey: Neutral Sentiment Grows

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

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 3.1 percentage points to 25.4%. Bullish sentiment is unusually low and is below its historical average of 37.5% for the 14th time in 16 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 5.2 percentage points to 17.7%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 39th time in 41 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 2.1 percentage points to 56.9%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 20th time in 22 weeks. Bearish sentiment has now been above 50% for eight consecutive weeks, the longest period over 50% in the survey’s history.

The bull-bear spread (bullish minus bearish sentiment) decreased 1.0 percentage points to –31.4%. The bull-bear spread is below its historical average of 6.5% for the 15th time in 17 weeks.

This week’s special question asked AAII members what type of stocks they are favoring.

Here is how they responded:

• Dividend stocks: 35.5%
• Value stocks: 15.8%
• Growth stocks: 9.6%
• Small-cap stocks: 2.5%
• A mix of the above/other: 36.3%

See more Sentiment Survey results.