Bullish sentiment among small investors has rebounded a bit this week according to the AAII. Charles Rotblut at AAII reports the details:
“After rising for five consecutive weeks, bearish sentiment declined slightly. The latest AAII Sentiment Survey saw a 1.2 percentage point decrease in bearish sentiment to 41.9%. Bullish sentiment rebounded for the first time in four weeks, jumping 7.5 percentage points to 36.8%. Neutral sentiment registered 21.4%, a 6.3 percentage point drop.
The recent stabilization in the equity markets helped to calm the nerves of investors following the recent mini-correction. Since closing above 1,150 on January 19, the S&P 500 has declined by more than 7%. Now that stocks have found short-term support, some investors are moving out of the neutral camp and adopting a more optimistic outlook.”
All in all, we still haven’t seen a fear filled low that has been consistent at many market lows over the last few years. Investor sentiment remains very jumpy and continues to bounce from bullish to bearish on the drop of a hat. The current reading is a relatively neutral and shows the continuing confusion that has come to be a trademark of the equity markets in recent months.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.