AAII Sentiment Survey: Neutral Sentiment Slumps

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 0.8 percentage points to 35.5%. Bullish sentiment is below its historical average of 37.5% for the fifth consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 2.8 percentage points to 24.6%. Neutral sentiment is below its historical average of 31.0% for the 24th consecutive week.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 2.0 percentage points to 39.9%. Bearish sentiment is above its historical average of 31.5% for the 28th consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 1.2 percentage points to –4.4%. The bull-bear spread is below its historical average of 6.5% for the fifth consecutive week.

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: 45.1%
• Valuations are mixed, with some stocks expensive and others cheap: 38.5%
• Stocks, in general, are fairly valued: 11.5%
• Stocks, in general, are undervalued: 3.3%
• Not sure/no opinion: 0.8%

See more Sentiment Survey results.