Neutral Outlook for Stocks

Individual investors are becoming more neutral about the short-term outlook for stocks, according to a new survey.

The report from the American Association of Individual Investors (AAII) found that, in the week ending Sept. 4, both optimism and pessimism among traders decreased compared to the prior week.

Neutral sentiment, the belief that stocks will remain stable over the next six months, rose by 7.9 percentage points to 29.8%. However, this figure remains below the historical average of 31.5% for the ninth consecutive week.

Sentiment Breakdown

• Bullish sentiment (expectation of stock increase) dropped by 5.8 percentage points to 45.3%, but still surpasses the historical average of 37.5% for the 43rd time in 44 weeks.
• Bearish sentiment (expectation of stock decline) fell by 2.1 percentage points to 24.9%, below the historical average of 31.0% for the fourth straight week.
• The difference between bullish and bearish sentiment decreased by 3.8 percentage points to 20.4%, yet remains above the historical average of 6.5%.

Investment Plans and Election Impact

When asked about potential delays in investment moves until after the US presidential election in November:
– 60.0% of respondents are maintaining their long-term investment plans.
– 15.9% indicated they might change their approach post-election results.
– 9.6% plan to delay new investments until after the vote.
– Another 9.6% have adopted a more conservative strategy.

The AAII emphasizes that the indicator aims to provide a forward-looking perspective of the market, reducing bias from relying solely on historical data.