VTI - AAII Sentiment Survey: Optimism Falls While Neutral Sentiment Rises

2024-01-18 14:37:38 ET

Summary

• Bullish sentiment decreased 8.2 percentage points to 40.4%.
• Neutral sentiment increased 5.6 percentage points to 32.9%.
• Bearish sentiment increased 2.6 percentage points to 26.8%.

Optimism among individual investors about the short-term outlook for stocks fell in the latest AAII Sentiment Survey. Meanwhile, neutral sentiment increased to a level above its historical average.

Bullish sentiment, expectations that stock prices will rise over the next six months, decreased 8.2 percentage points to 40.4%. Bullish sentiment remains above its historical average of 37.5% for the 11th consecutive week.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 5.6 percentage points to 32.9%. Neutral sentiment is above its historical average of 31.5% for the first time in seven weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, increased 2.6 percentage points to 26.8%. Bearish sentiment is below its historical average of 31.0% for the 11th consecutive week.

The bull-bear spread (bullish minus bearish sentiment) decreased 10.8 percentage points to 13.6%. The bull-bear spread is above its historical average of 6.5% for the 11th consecutive week.

This week's special question asked AAII members which fixed-income instrument they are overweighting in their portfolios.

Here is how they responded:

• Money market funds: 36.8%
• U.S. Treasuries: 21.2%
• Investment-grade corporate bonds: 9.3%
• High-yield corporate bonds: 5.2%
• Other/not sure: 26.4%

This week's Sentiment Survey results:

• Bullish: 40.4%, down 8.2 percentage points
• Neutral: 32.9%, up 5.6 percentage points
• Bearish: 26.8%, up 2.6 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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