AAII Sentiment Survey: Here’s How Investors Feel Now

Neutral sentiment rose to a four-month high, as both optimism and pessimism declined in the latest AAII Sentiment Survey.

Bullish sentiment, expectations that stock prices will rise over the next six months, declined 0.5 percentage points to 42.3%. This is the third consecutive week optimism has declined. Nonetheless, bullish sentiment is above its historical average of 39% for the sixth consecutive week and the 11th out of the last 12 weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, rose 1.3 percentage points to 29.0%. This is the highest neutral sentiment has been since October 11, 2012. Even with the increase, neutral sentiment is below its historical average of 30.5% for the 18th consecutive week and the 20th in the past 22 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, declined 0.8 percentage points to 28.7%. This is the ninth time in 10 weeks that pessimism is below its historical average of 30.5%.

Here’s how the 3 major stock indices have traded over the past month:

Since setting a two-year high of 52.3% three weeks ago, bullish sentiment…