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AAII Sentiment Survey: Optimism Rebounds Above 30%

sentiment chart 08-11-16

Optimism among individual investors about the short-term direction of stock prices rebounded back above 30% in the latest AAII Sentiment Survey. Neutral sentiment pulled back modestly, while pessimism was unchanged.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 1.5 percentage points to 31.3%. The rise reversed last week’s decline. This is the 40th consecutive week and the 73rd out of the past 75 weeks with a bullish sentiment reading below its historical average of 38.5%.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined 1.5 percentage points to 42.0%. This is the 28th consecutive week with a neutral sentiment reading above its historical average of 31.0%.

Bearish sentiment, expectations that stock prices will fall over the next six months, is unchanged at 26.8%. Pessimism is below its historical average of 30.5% for the sixth consecutive week.

Bullish sentiment is above 30% for the fifth time in six weeks. This fact shows just how low optimism has been. Over the span of the past 12 months, bullish sentiment was at or above 30% during 14 out of 16 weeks between August 12 and November 25, 2015, and during six out of seven weeks between February 24 and April 6, 2016. The remainder of the time, optimism has mostly stayed below 30%. So, while still low, optimism has improved recently overall on a comparative basis.

This week’s AAII Sentiment Survey results:

  • Bullish: 31.3%, up 1.5 percentage points
  • Neutral: 42.0%, down 1.5 percentage points
  • Bearish: 26.8%, unchanged

Historical averages:

  • Bullish: 38.5%
  • Neutral: 31.0%
  • Bearish: 30.5%

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.).

Want to weigh in? Take the survey yourself and see results online at http://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.

 

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