AAII Sentiment Survey: Pessimism Spikes

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 1.1 percentage points to 31.9%. Bullish sentiment is below its historical average of 37.5% for the fourth consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 9.7 percentage points to 21.7%. Neutral sentiment is unusually low and is below its historical average of 31.5% for the 86th time in 88 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 10.9 percentage points to 46.4%. Bearish sentiment is unusually high and is above its historical average of 31.0% for the fifth consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 12.0 percentage points to –14.4%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the fifth consecutive week.

This week’s special question asked AAII members what impact the military conflict with Iran is having on their short-term outlook for stocks.

Here is how they responded:

• It is bearish for stocks: 38.0%

• It is a reason to be a little more cautious: 33.5%

• It creates a buying opportunity: 21.9%

• No impact: 4.6%

• Not sure/no opinion: 2.1%

This week’s Sentiment Survey results:

Bullish: 31.9%, down 1.1 points
Neutral: 21.7%, down 9.7 points
Bearish: 46.4%, up 10.9 points

Historical averages:

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

See more Sentiment Survey results.