Investments

Investor Sentiment Of ‘Neutral’ Hits Two-Month High

The percentage of individual investors describing their short-term outlook for the stock market as “neutral” is at a two-month high. The latest AAII Sentiment Survey also shows declines in both optimism and pessimism.

Bullish sentiment, expectations that stock prices will rise over the next six months, fell 1.9 percentage points to 31.7%. Bullish sentiment is below its historical average of 38.0% for 39th time this year.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 3.1 percentage points to 39.2%. Neutral sentiment was last at this level on October 2, 2019. The increase keeps neutral sentiment above its historical average of 31.5% for the 28th time in 29 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, pulled back by 1.1 percentage points to 29.1%. Pessimism is below its historical average of 30.5% for a seventh consecutive week.

Since topping 40% on consecutive weeks in early November, optimism has fallen by a cumulative nine percentage points. Pessimism, conversely, has stayed in a very tight range over the past three weeks and registered between 28.3% and 30.3% during five out of the last seven weeks.

Neutral sentiment is near the upper end of its typical range. Readings of 40.0% or higher are unusually high.

In the spirit of the holidays, our special question asked AAII members what their favorite thing is to eat on Thanksgiving. Unsurprisingly, leading the poll on the best Thanksgiving dish was turkey, with 35% of the respondents naming it as their favorite. Following close behind however, was toppings, with 27% of respondents naming stuffing, cranberry sauce or gravy as their favorite part of the meal. Other respondents from this survey state that their favorite thing to eat is side dishes (17%) and desserts (15%). In the dessert category, pie (specifically pumpkin) is named most frequently. Finally, 5% of respondents fall into the “other” category; honorable mentions include: ham, duck and oysters.

Here is a sampling of the responses:

  • “Candied yams, even though my blood sugar doesn’t like them.”
  • “Beer.”
  • “Dressing and lots of gravy, with a side mountain of buttered mashed potatoes, also flooded in gravy!”
  • “Turkey … duh!”
  • “Pie … lots of pie.”

Investor Sentiment Of ‘Neutral’ Hits Two-Month High

As of December 5, 2019

American Association of Individual Investors

AAII Sentiment Survey results:

  • Bullish: 31.7%, down 1.9 percentage points
  • Neutral: 39.2%, up 3.1 percentage points
  • Bearish: 29.1%, down 1.1 percentage points

Historical averages:

  • Bullish: 38.0%
  • Neutral: 31.5%
  • Bearish: 30.5%

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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.

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