AAII Sentiment Survey: Pessimism Rebounds

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Pessimism about the short-term direction of the stock market among individual investors rebounded in the latest AAII Sentiment Survey. Both optimism and neutral sentiment fell back below their respective averages.

Bullish sentiment, expectations that stock prices will rise over the next six months, pulled back by 4.9 percentage points to 33.5%. Optimism is below its historical average of 38.5% for the 16th time in 19 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, declined by 2.0 percentage points to 30.2%. Neutral sentiment is below its historical average of 31.0% for the 10th time in 12 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 6.9 percentage points to 36.3%. Pessimism is above its historical average of 30.5% for the 17th time in 19 weeks.

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

Market volatility remains on the minds of many investors, with some still anticipating larger losses. Others are focused on trade and the outcome of ongoing negotiations. Also having an influence are Washington politics (including President Trump and the change in House leadership), corporate earnings, the Federal Reserve, valuations and concerns about the pace of economic growth.

This week’s AAII Sentiment Survey results:

  • Bullish: 33.5%, down 4.9 percentage points
  • Neutral: 30.2%, down 2.0 percentage points
  • Bearish: 36.3%, up 6.9 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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