AAII Sentiment Survey: Optimism Recovers, Slightly

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 7.2 percentage points to 32.5%. The increase was the highest single-week jump in the bullish reading since the middle of June. The weekly sentiment reading of investors expecting stock prices to rise over the next six months continues to be below its long-term average of 39%. Bullish sentiment has measured below its historical average for 10 consecutive weeks.

Neutral sentiment, expectations that stock prices will stay essentially flat over the next six months, fell 6.0 percentage points to 20.7%. This is the 11th consecutive week that neutral sentiment has been below its historical average of 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, fell 1.2 percentage points to 46.8%. This was the seventh time in the past nine weeks that bearish sentiment has been above 40%. It is also the 29th time out of the last 32 weeks that bearish sentiment has been above its historical average of 30%. While bearish sentiment declined, it remains more than one standard deviation above its long-term average.

This week’s AAII Sentiment Survey results:

  • Bullish: 32.5%, up 7.2 percentage points
  • Neutral: 20.7%, down 6.0 percentage points
  • Bearish: 46.8%, down 1.2 percentage points

Historical averages:

  • Bullish: 39%
  • Neutral: 31%
  • Bearish: 30%

Charles Rotblut is the author of the new book Better Good than Lucky: How Savvy Investors Create Fortune with the Risk-Reward Ratio. The AAII Sentiment Survey has been conducted weekly since July 1987 and asks AAII members whether they think stock prices will rise, remain essentially flat, or fall over the next six months. The survey period runs from Thursday (12:01 a.m.) to Wednesday (11:59 p.m.). The survey and its results are available online at http://www.aaii.com/sentimentsurvey

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