VTI - AAII Sentiment Survey: Optimism Continues Its Descent

2023-10-26 15:18:52 ET

Summary

• Bullish sentiment decreased 4.8 percentage points to 29.3%.
• Neutral sentiment fell 3.8 percentage points to 27.5%.
• Bearish sentiment increased 8.6 percentage points to 43.2%.

Optimism among individual investors about the short-term outlook for stocks continued its decline in the latest AAII Sentiment Survey. Meanwhile, pessimism increased.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 4.8 percentage points to 29.3%. Optimism is below its historical average of 37.5% for the sixth time in seven weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, fell 3.8 percentage points to 27.5%. Neutral sentiment is below its historical average of 31.5% for the fifth time in eight weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 8.6 percentage points to 43.2%. Pessimism is now at an unusually high level and is above its historical average of 31.0% for the sixth time in eight weeks.

The bull-bear spread (bullish minus bearish sentiment) decreased 4.8 percentage points to –5.3%. The bull-bear spread remains below its historical average of 6.4% for the seventh time in eight weeks.

This week’s special question asked AAII members which of the following they think is the best long-term investment:

• Stocks: 72.8%
• Cash (Savings Accounts, Money Market Funds, etc.): 11.6%
• Privately Held Real Estate: 8.4%
• Commodities (Including Gold): 4.3%
• Bonds: 2.9%

This week’s Sentiment Survey results:

• Bullish: 29.3%, down 4.8 percentage points
• Neutral: 27.5%, down 3.8 percentage points
• Bearish: 43.2%, up 8.6 percentage points

Historical averages:

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

The AAII Sentiment Survey has been conducted weekly since July 1987.

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