AAII Sentiment Survey: Pessimism Falls to Nearly a Four-Month Low

The percentage of individual investors describing their short-term outlook for the stock market as “bearish” is at its lowest level in nearly four months. The latest AAII Sentiment Survey also shows increases in bullish and neutral sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.5 percentage points to 34.6%. This is a seven-week high. Nonetheless, optimism remains below its historical average of 38.0% for the 13th consecutive week and the 18th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rebounded by 1.8 percentage points to 26.6%. Neutral sentiment is below its historical average of 31.5% for the 16th consecutive week and the 20th time in 21 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 3.3 percentage points to 38.9%. Pessimism was last lower on February 19, 2020 (28.7%). Even with the decrease, bearish sentiment is above its historical average of 30.5% for the 15th consecutive week.

Pessimism is back within its typical range for the first time since early March. Both bullish and neutral sentiment continue to be within their typical ranges.

The current level of pessimism reflects the coronavirus pandemic and concerns about the economy. However, some AAII members have been encouraged by the rebound in the stock market from its March lows. Other factors influencing AAII members’ sentiment include the economy, corporate earnings, the November U.S. presidential election and interest rates.

This week’s AAII Sentiment Survey results:

• Bullish: 34.6%, up 1.5 percentage points
• Neutral: 26.6%, up 1.8 percentage points
• Bearish: 38.9%, down 3.3 percentage points

Historical averages:

• Bullish: 38.0%
• Neutral: 31.5%
• Bearish: 30.5%

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/sentimentsurvey.

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership

See more Sentiment Survey results.