Highest Level of Pessimism Since March 2009
The percentage of individual investors describing their six-month outlook for stocks as “bearish” surged to its highest level since 2009 in the latest AAII Sentiment Survey. At the same time, optimism remains at an unusually low level.
What Direction Do AAII Members Feel The Stock Market Will Be In The Next 6 Months?
·Bullish sentiment - expectations that stock prices will rise over the next six months
- Decreased by 2.4 percentage points to 16.4%
- Optimism is below its historical average of 38.0% for the 23rd consecutive week and is at an unusually low level (below 27.9%) for the 13th time out of the last 16 weeks.
·Neutral sentiment - expectations that stock prices will stay essentially unchanged over the next six months
- Fell by 13.1 percentage points to 24.2%.
- Neutral sentiment below its historical average of 31.5% for the first time six weeks.
·Bearish sentiment - expectations that stock prices will fall over the next six months
- Rose sharply by 15.5 percentage points to 59.4%.
- Pessimism was last higher on March 5, 2009 (70.3%). This is the fourth consecutive week and the 22nd time out of the last 23 that bearish sentiment is above its historical average of 30.5%.
- It is also the 12th time out of the last 15 weeks with an unusually high level of pessimism.
Opinions: The Nasdaq is overvalued
- Slightly more than two out of five respondents (41%) view the volatility from a bearish lens. They believe volatility will continue as long as global factors such as the coronavirus pandemic and the Russia-Ukraine conflict occur.
- About 20% of respondents say that the volatility was expected and the Nasdaq was due for a correction.
- Conversely, approximately 11% have a bullish outlook regarding the volatility and the factors impacting it.
- Roughly 8% of respondents say that the Nasdaq’s volatility presents them with buying opportunities. Finally, 8% of respondents mention high valuations as the cause of the Nasdaq’s volatility.
About AAII Semtiment Survey
- Measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market short term.
- Individuals are polled from the AAII Web site on a weekly basis.
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