AAII Sentiment Survey: Neutral Sentiment at Highest Level Since February

The percentage of individual investors describing their outlook for stocks as “neutral” is at its highest level since February. The latest AAII Sentiment Survey also shows small declines in optimism and pessimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, declined by a mere 0.3 percentage points to 34.3%. Optimism remains below its historical average of 38.0% for the 14th consecutive week and the 19th week this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.1 percentage points to 27.7%. Neutral sentiment was last higher on February 26, 2020 (30.4%). Even with the increase, neutral sentiment is below its historical average of 31.5% for the 17th consecutive week and the 21st time in 22 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 0.8 percentage points to 38.1%. Pessimism was last lower on February 19, 2020 (28.7%). Bearish sentiment is above its historical average of 30.5% for the 16th consecutive week.

All three readings are within their typical historical ranges.

The survey period runs from Thursday morning through Wednesday night. Reminders to take the survey are sent to a rotating group of AAII members on Mondays.

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: 34.3%, down 0.3 percentage points
• Neutral: 27.7%, up 1.1 percentage points
• Bearish: 38.1%, down 0.8 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.

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See more Sentiment Survey results.