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 6.5 percentage points to 35.9%. Bullish sentiment is below its historical average of 37.5% for the 18th time in 20 weeks and is above 30% for only the sixth time this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 0.6 percentage points to 19.7%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 43rd time in 45 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 7.1 percentage points to 44.4%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the 24th time in 26 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 13.6 percentage points to –8.5%. The bull-bear spread is below its historical average of 6.5% for the 19th time in 21 weeks.

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

Here is how they responded:

• It was the right move: 73.6%
• They should have cut rates: 17.1%
• They should have raised rates: 2.7%
• Not sure/no opinion: 6.6%

See more Sentiment Survey results.