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AAII Sentiment Survey: Optimism Rebounds, But Stays Below Average

Optimism among individual investors about the short-term direction of the stock market rebounded, but remained below average in the latest AAII Sentiment Survey. Neutral sentiment pulled back while bearish sentiment remained in its recent range.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 8.5 percentage points to 35.4%. Even with the increase, optimism is below its historical average of 38.5% for the 20th time out of the last 21 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 6.5 percentage points to 35.0%. This is a six-week low. Nonetheless, neutral sentiment is above its historical average of 31.0% for the sixth consecutive week and the 11th time in 12 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 2.0 percentage points to 29.5%. The historical average is 30.5%.

During five out of the last six weeks, pessimism has stayed within a two-percentage-point range of 29.5% to 31.5%. The only exception was May 17, when bearish sentiment rose to 34.3%.

New record highs for the S&P 500 and the NASDAQ encouraged some individual investors, but the Trump administration’s ability (or lack thereof) to move forward on economic and tax policy remains on the forefront of many our members’ minds. Also playing a role in influencing sentiment are earnings, valuations, concerns about the possibility of a pullback in stock prices and interest rates/monetary policy.

 

This week’s AAII Sentiment Survey results:

  • Bullish: 35.4%, up 8.5 percentage points
  • Neutral: 35.0%, down 6.5 percentage points
  • Bearish: 29.5%, down 2.0 percentage points

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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