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Four out of Ten Members Pessimistic About the Market

This week’s Sentiment Survey special question asked AAII members what impact the market’s weak start to 2016 has had on their six-month outlook for stock prices. More than four out of 10 respondents (42%) said this month’s decline in stock prices has had a negative impact. The majority of these members anticipate further price declines, while some said that they are less/no longer optimistic or are now nervous or cautious. Nearly 17% of respondents said the decline has not had an impact on their outlook. Many of these respondents said the decline just confirms their view about market direction. About 16% of respondents describe the decline in stock prices as having a positive impact on their expectations. These members either expect stock prices to be higher over the next six to 12 months or are looking to buy stocks at reduced prices.

Here is a sampling of the responses:

  • “I am becoming very defensive right now and am moving as much as I can into cash.”
  • “I think the outlook is much better. Since stocks are ‘on sale,’ I am now buying (in small blocks).”
  • “Confirmed my down signals for a very tired bull market.”
  • “Depressed my favorable outlook.”
  • “Makes me a more wait-and-see investor.”
  • “I view this weakness as temporary and six months from now, we will look back at it as a buying opportunity.”

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

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