The percentage of individual investors expecting an increase in stock prices rebounded this week according to the latest AAII Sentiment Survey. Neutral sentiment declined while pessimism is slightly higher.
Bullish sentiment, expectations that stock prices will rise over the next six months, rebounded by 4.2 percentage points to 39.3%. Optimism is above its historical average of 38.5% for just the fifth time in 24 weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, pulled back by 4.5 percentage points to 35.3%. Even with the decline, neutral sentiment is above its historical average of 31.0% for the fifth time in seven weeks.
Bearish sentiment, expectations that stock prices will fall over the next six months, rose 0.3 percentage points to 25.4%. Pessimism remains below its historical average of 30.5% for a third consecutive week.
At current levels, all three sentiment indicators are within their typical historical ranges, though&a;nbsp;neutral&a;nbsp;sentiment is very close to the top of its range.
While the rebound in stock prices is encouraging some individual investors, others have concerns about its sustainability. Many individual investors are monitoring trade negotiations. Also having&a;nbsp;an influence&a;nbsp;are Washington politics (including President Trump and Democratic control of the House of Representatives), corporate earnings, the Federal Reserve, valuations and concerns about the pace of economic growth.
This week&a;rsquo;s special question asked AAII members how important it is that the stock market recoup all of last year&a;rsquo;s losses within the next few months. Slightly more than one-third of all respondents (36%) do not think this is very important. Many say they take a long-term view and don&a;rsquo;t worry about short-term moves. An additional 15% of respondents describe a full recovery occurring in the short term as being desirable, but not necessary. Slightly more than 24% of respondents say it is important for stocks to fully recover their losses in the short term.
Many of these respondents say doing so will build confidence, while others say they are in retirement or believe a full recovery is important because it will raise the level from which the next drop starts. About 8% of respondents think such a recovery may not occur over the short term.
Here is a sampling of the responses:
&l;/p&g;&l;ul&g;&l;li&g;&a;ldquo;Being a long-term investor, it is not important to me that the market quickly recoups last year&a;rsquo;s losses.&a;rdquo;&l;/li&g; &l;li&g;&a;ldquo;It doesn&a;rsquo;t need to be within the next few months as long as it does so within a year or so.&a;rdquo;&l;/li&g; &l;li&g;&a;ldquo;Very important. I&a;rsquo;m 81 years old and will not have enough time to recover.&a;rdquo;&l;/li&g; &l;li&g;&a;ldquo;I&a;rsquo;m not that concerned about recouping all the losses quickly. A gradual rise is a better sign of strength than an exuberant market.&a;rdquo;&l;/li&g; &l;li&g;&a;ldquo;I expect a deep correction over the next six months as earnings do not support current levels.&a;rdquo;&l;/li&g; &l;/ul&g;
&l;img class=&q;size-full wp-image-59442&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/sentiment-chart-02-21-19.gif?&q; alt=&q;&q; data-height=&q;607&q; data-width=&q;642&q;&g; As of February 21, 2019
This week&a;rsquo;s AAII Sentiment Survey results:
&l;ul&g;&l;li&g;Bullish: 39.3%, up 4.2 percentage points&l;/li&g; &l;li&g;Neutral: 35.3%, down 4.5 percentage points&l;/li&g; &l;li&g;Bearish: 25.4%, up 0.3 percentage points&l;/li&g; &l;/ul&g;
Historical averages:
&l;ul&g;&l;li&g;Bullish: 38.5%&l;/li&g; &l;li&g;Neutral: 31.0%&l;/li&g; &l;li&g;Bearish: 30.5%&l;/li&g; &l;/ul&g;&l;em&g;The AAII Sentiment Survey has been conducted weekly since July 1987. The survey and its results are&l;span&g;&a;nbsp;&l;/span&g;&l;/em&g;&l;a href=&q;http://www.aaii.com/sentimentsurvey&q; rel=&q;nofollow&q; target=&q;_blank&q;&g;&l;em&g;available online.&l;/em&g;&l;/a&g;
&l;em&g;If you want to become an effective manager of your own assets and achieve your financial goals, consider a&l;/em&g;&l;span&g;&a;nbsp;&l;/span&g;&l;a href=&q;http://www.aaii.com/join/tryaaiinow&q; rel=&q;nofollow&q; target=&q;_blank&q;&g;&l;em&g;risk-free 30-day Trial AAII Membership&l;/em&g;&l;/a&g;&l;em&g;.&l;/em&g;
No comments:
Post a Comment