AAII Sentiment Survey: Pessimism Leaps

Pessimism among individual investors about the short-term outlook for stocks increased in the latest AAII Sentiment Survey. Meanwhile, optimism and neutral sentiment decreased.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 1.5 percentage points to 30.4%. Bullish sentiment is below its historical average of 37.5% for the fifth consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 4.1 percentage points to 17.6%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 87th time in 89 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 5.6 percentage points to 52.0%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the sixth consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 7.2 percentage points to –21.6%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the sixth consecutive week.

This week’s special question asked AAII members which market-capitalization style of stocks they expect to outperform over the next six months.

Here is how they responded:

• Small-cap stocks: 19.1%

• Mid-cap stocks: 15.8%

• Large-cap stocks: 30.2%

• Not sure/no opinion: 34.9%

This week’s Sentiment Survey results:

Bullish: 30.4%, down 1.5 points
Neutral: 17.6%, down 4.1 points
Bearish: 52.0%, up 5.6 points

Historical averages:

Bullish: 37.5%
Neutral: 31.5%
Bearish: 31.0%

See more Sentiment Survey results.