AAII Sentiment Survey: Pessimism Tumbles

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

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 1.2 percentage points to 44.4%. Bullish sentiment is above its historical average of 37.5% for the ninth time in 12 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 0.7 percentage points to 24.8%. Neutral sentiment is below its historical average of 31.5% for the 80th time in 82 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 1.9 percentage points to 30.8%. Bearish sentiment is slightly below its historical average of 31.0% for the sixth time in nine weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 3.2 percentage points to 13.6%. The bull-bear spread is above its historical average of 6.5% for the 13th time in 52 weeks.

This week’s special question asked AAII members which factor is most influencing their six-month outlook for stocks.

Here is how they responded:

• The economy and/or inflation: 35.0%

• Geopolitics: 29.1%

• Valuations: 15.5%

• Monetary policy/interest rates: 13.6%

• Other: 6.4%

This week’s Sentiment Survey results:

Bullish: 44.4%, up 1.2 points
Neutral: 24.8%, up 0.7 points
Bearish: 30.8%, down 1.9 points

Historical averages:

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

See more Sentiment Survey results.