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Investors Split on Accuracy of Current Market Sentiment

This week’s Sentiment Survey special question asked AAII members what they thought about the overall sentiment being reflected in the market among both institutional and individual investors. Responses were mixed. Almost 28% of respondents agree with the current level of optimism or otherwise describe sentiment as bullish. Economic growth, earnings growth and the tax cuts were among the reasons given. A nearly equal proportion (27%) of respondents think there is too much optimism priced in or otherwise believe the downside risks are not being properly priced in. Almost 15% of respondents say there are opposing trends currently being reflected in the stock market.

Here is a sampling of the responses:

  • “The market may be a bit overbought. There are a lot of good expectations priced in, and I think bad news could cause a decline.”
  • “There is a lot of optimism about the economy and corporate earnings, but the political environment makes the market very nervous.”
  • “The market goes up; sentiment is accurate.”
  • “Investors are not yet paying attention to tariffs and the trade war.”
  • “Stocks have performed well and the economy is stronger than it has been in a long time.”

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