Half of Investors Skeptical of Recent Rebound in Stock Prices


This week’s Sentiment Survey special question asked AAII members to share their thoughts about the recent rebound in stock prices. Nearly half (47%) of all respondents are unsure about whether it is sustainable. Many think downside volatility could return, earnings have peaked or other negative factors could play a role. A few mention the ongoing trade war with China as a point of uncertainty. About 12% of respondents think politics are affecting the markets, with some bringing up the government shutdown. Slightly more than 21% describe the rebound as a bounce from last year’s decline or reflective of an oversold market. An additional 11% think the rally is sustainable.

Here is a sampling of the responses:

  • “Just a rebound from the sell-off at the end of December that was not justified given the financial health of companies.”
  • “An aberration. The economy is still punch drunk on low interest rates.”
  • “I think it will continue throughout most of 2019.”
  • “I don’t think it will go much further. We are at the tail end of the economic upswing and the boom in corporate profits is over.”
  • “Headline news is driving investors crazy. Trade with China is another big factor.”

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