AAII Sentiment Survey: Optimism Is Near a Three-Year High

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Optimism among individual investors is near a three-year high, according to the latest AAII Sentiment Survey. Pessimism, meanwhile, is near a two-year low. Bullish sentiment — expectations that stock prices will rise over the next six months — jumped 7.6 percentage points to 55.1 percent. This is the highest level of optimism recorded by our survey since January 6, 2011. It is also the tenth time in the past twelve weeks and the twelfth in the last sixteen weeks that bullish sentiment is above 40 percent. The historical average is 39.0 percent.

Neutral sentiment, expectations that stock prices will stay essentially unchanged, declined 1.1 percentage points to 26.4 percent. The drop puts neutral sentiment at a four-week low. This is the also the fourth time in the past five weeks that neutral sentiment is below its historical average of 30.5 percent. Bearish sentiment, expectations that stock prices will fall over the next six months, plunged 6.5 percentage points to 18.5 percent. This is the eleventh consecutive week and the thirteenth out of the past 15 weeks with a bearish sentiment reading below the historical average of 30.5 percent.

This week’s results puts bullish sentiment at an unusually high level and bearish sentiment at an unusually low level  – more than one standard deviation above and below the respective historical averages.

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