AAII Sentiment Survey: Fewer Than 1 Out Of 5 Investors Have A “Neutral” Outlook
Summary
- Bullish: 54.0%, up 8.0 percentage points.
- Neutral: 19.4%, down 7.8 percentage points.
- Bearish: 26.6%, down 0.2 percentage points.
(Due to a database error, the Sentiment Survey results we posted earlier were incorrect. Here are the corrected numbers.)
Fewer than one out of five individual investors described their short-term outlook for stocks as “neutral” in the latest AAII Sentiment Survey. Optimism, meanwhile, is back at an unusually high level.
Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 8.0 percentage points to 54.0%. Optimism was last higher on November 11, 2020 (55.8%). The increase keeps bullish sentiment above its historical average of 38.0% for the ninth consecutive week.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, plunged 7.8 percentage points to 19.4%. Neutral sentiment was last lower on November 11, 2020 (19.3%). The drop keeps neutral sentiment below its historical average of 31.5% for the 49th time out of the past 52 weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, declined 0.2 percentage points to 26.6%. Pessimism is below its historical average of 30.5% for the ninth consecutive week.
Optimism is now at an unusually high level. Neutral sentiment is at an unusually low level. Historically, both above-average readings for bullish sentiment and below-average readings for neutral sentiment have been followed by below-average six- and 12-month returns for the S&P 500 index.
The rollout of the vaccines has helped to improve the outlook of many individual investors. The stock market’s momentum is also having an influence on sentiment. Concern about the shorter-term trends in coronavirus cases and the resulting economic impact remain, however. Also playing a role are the forthcoming administration and the Democrats’ control of the Senate, the rising level of national debt, valuations and interest rates.
This week’s AAII Sentiment Survey results:
- Bullish: 54.0%, up 8.0 percentage points
- Neutral: 19.4%, down 7.8 percentage points
- Bearish: 26.6%, down 0.2 percentage points
Historical averages:
- Bullish: 38.0%
- Neutral: 31.5%
- Bearish: 30.5%
The AAII Sentiment Survey has been conducted weekly since July 1987. The survey and its results are available online.
If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership.
Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.