AAII Sentiment Survey: Optimism Rises But Stays Below Average

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Optimism among individual investors about the short-term direction of the stock market rose but remains below average. The latest AAII Sentiment Survey also shows declines in neutral and bearish sentiment.

Bullish sentiment, expectations that stock prices will rise over the next six months, rose 4.2 percentage points to 36.2%. Even with the increase, optimism remains below its historical average of 38.5% for the third consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 3.2 percentage points to 32.7%. Neutral sentiment remains above its historical average of 31.0% for the 31st time in 32 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined by 0.9 percentage points to 31.1%. Pessimism is above its historical average of 30.5% for a third consecutive week.

At current levels, all three indicators are well within their typical historical ranges.

Most of the responses for this week’s survey were recorded before yesterday’s Federal Open Market Committee (FOMC) meeting statement was released. The survey period runs from Thursday through Wednesday. In July, almost half of the surveyed AAII members said they favored further rate hikes. Some, however, expressed concern about the impact that higher rates would have on the economy. We’re asking them again about their views on monetary policy.

Tariffs and the possibility of an escalating trade war remain front and center on the minds of many individual investors. Also influencing sentiment are Washington politics (including President Donald Trump), midterm elections, economic growth, valuations and corporate profits.

This week’s AAII Sentiment survey results:

  • Bullish: 36.2%, up 4.2 percentage points
  • Neutral: 32.7%, down 3.2 percentage points
  • Bearish: 31.1%, down 0.9 percentage points

Historical averages:

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

Want to weigh in? Take the survey yourself and see results online at 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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