A Third of Investors Cautious of Market’s Calm


This week’s Sentiment Survey special question asked AAII members how the market’s ongoing lack of volatility is affecting their sentiment toward stocks. The question was posted last Thursday and responses, which were mixed, were gathered through yesterday. More than a third of respondents (36%) say the market’s relative calm and/or sustained upward rise has made them more cautious or is leading them to anticipate a forthcoming drop in prices. Conversely, approximately 21% of respondents say the market’s relative calm and sustained upward trend is reason to be optimistic. Nearly 28% of respondents say the current level of volatility is not affecting their sentiment toward stocks.

Here is a sampling of the responses:

  • “Low volatility and high valuations are a sign for a major pullback on the horizon.”
  • “It makes me feel that stocks are less risky.”
  • “No effect. I know the market will be more volatile at some point. That just means there will be more buying opportunities.”
  • “Bearish. I believe stocks are overpriced and cannot continue to stay as bullish as they are currently are.”
  • “No change. I plan allocations for five years out.”

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