Investing.com -- The latest AAII Sentiment Survey reveals a decrease in optimism among individual investors regarding the short-term outlook for stocks. In contrast, both neutral sentiment and pessimism have experienced an increase.
Bullish sentiment, which represents expectations that stock prices will rise over the next six months, fell by 9.2 percentage points to 25.4%. This unusually low level of optimism, which is below its historical average of 37.5%, has occurred for the third time in the past seven weeks. The last time optimism dropped to a lower level was on November 2, 2023, when it stood at 24.3%.
Neutral sentiment, which signifies expectations that stock prices will remain essentially unchanged over the next six months, rose by 6.0 percentage points to 34.0%. This is the first time in 12 weeks that neutral sentiment has surpassed its historical average of 31.5%.
Bearish sentiment, indicating expectations that stock prices will fall over the next six months, increased by 3.2 percentage points to 40.6%. This unusually high level of pessimism, above its historical average of 31.0%, has been recorded for the eighth time in the past nine weeks.
The bull-bear spread, calculated by subtracting bearish sentiment from bullish sentiment, fell 12.4 percentage points to -15.1%. This unusually low bull-bear spread is below its historical average of 6.5% for the fifth time in the past eight weeks.
In a special question, AAII members were asked about their performance forecast for the S&P 500 index in 2025. The responses were as follows: 14.5% expect the index to rise by 10% or more, 41.5% anticipate a rise between 2% and 9%, 14.1% predict the index will stay flat between -1% and +1%, 21.7% foresee a drop between 2% and 9%, and 8.2% expect a drop of 10% or more.
This week's sentiment survey results show bullish sentiment at 25.4% (down 9.2 points), neutral sentiment at 34.0% (up 6.0 points), and bearish sentiment at 40.6% (up 3.2 points). The historical averages are 37.5% for bullish sentiment, 31.5% for neutral sentiment, and 31.0% for bearish sentiment.
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