Latest AAII sentiment survey shows pessimism drops

Pessimism among individual investors has decreased, according to the latest American Association of Individual Investors (AAII) Sentiment Survey.

Bearish sentiment, reflecting expectations that stock prices will decline over the next six months, fell by 8.6 percentage points to 28.9%, according to the AAII.

This is said to mark the eighth time in the past 10 weeks that bearish sentiment has been below its historical average of 31.0%.

As bearish sentiment waned, both optimism and neutral sentiment saw notable increases. Bullish sentiment, which represents the expectation that stock prices will rise over the next six months, is said to have climbed by 2.0 percentage points to 42.5%.

The AAII notes that this optimism has now remained above its historical average of 37.5% for 40 of the past 41 weeks, indicating a sustained positive outlook among investors.

Neutral sentiment also rose, increasing by 6.6 percentage points to 28.6%. Although still below its historical average of 31.5%, the rise suggests a growing belief that the market may remain stable in the coming months.

The bull-bear spread, a measure of the difference between bullish and bearish sentiment, increased by 10.6 percentage points to 13.7%, well above its historical average of 6.5%.

This week’s survey also revealed that nearly half of respondents described the current state of the economy as “mixed,” reflecting ongoing uncertainty among investors.

Source: Investing.com