AAII Emotional Surveys: Optimistic Recovery Times Over 50%

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Optimism about the short-term moves of individual investors has returned more than 50%. The latest AAII sentiment survey also showed a neutral and bearish sentiment slide.

Bullish popularity, the stock price is expected to rise in the next six months, up 5.4 percentage points to 54.1%. This is the fourth time that optimism has risen over 50% in five weeks. The historical average was 38.5%.

Neutral sentiment, the stock price is expected to remain unchanged in the next six months, down 1.8 percentage points to 24.5%. Neutral sentiment for the seventh consecutive week below the historical average of 31.0%.

Market sentiment is sluggish. The share price is expected to fall in the next six months, down 3.7 pps to 21.4%. This decline makes pessimism close to the lower end of its typical historical range. The historical average is 30.5%.

Bullish sentiment is above the historical average for the sixth consecutive week. This is the longest period of 10 weeks since the 2016 election. In the current streak, optimism averaged 51.8%.

Historically, the S & P 500 has seen below-average and below-median returns after reading unusually high bullish sentiments in six months and twelve months. (One with a historical datasheet can be found on our website.)

Some individual investors are encouraged by the decision by major stock indexes to record highs, tax cuts and / or the Fed’s decision to keep raising rates. Other individual investors are worried about a possible downturn or a more serious decline. Even many investors who are optimistic about the overall stock market are expected to see fluctuations this year. Affect the investor sentiment, there are profit growth, economic growth, valuation and volatility. Washington politics remains the head of many individual investors.

This week’s special issue inquired about the members of the AAII, who they believe will most likely impact the 2018 stock price. Almost one-third (31%) of respondents indicated tax and / or corporate earnings. Many of those surveyed expect the tax cuts to result in higher profits. About 29% said they are political, national or international. More than 8% of respondents mentioned Trump’s name, some were good and some were unfavorable. The Fed, interest rates and monetary policy were named after 16% of respondents. Some interviewees cite more than one factor that they expect to influence the market.
This week’s AAII sentiment survey showed:

Read more: 54.1%, up 5.4 percentage points
Neutral: 24.5%, down 1.8 percentage points
Bearish: 21.4%, down 3.7 percentage points
Historical average:

Bullish: 38.5%
Neutral: 31.0%
Bearish: 30.5%

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