LIVE MARKETS-Individual investor bears perk up - AAII

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THE GIFT OF DATA: HOME SALES, UMICH

INDIVIDUAL INVESTOR BEARS PERK UP - AAII

Pessimism among individual investors over the short-term outlook for U.S. stocks rose in the latest American Association of Individual Investors (AAII) Sentiment Survey. With this, both optimism and neutral sentiment slipped.

Meanwhile, a little over a third of investors (35%) surveyed said that the rise of passive investing has not affected their approach to the markets because they use a mix of instruments.

AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, increased 2.6 percentage points to 33.2%. Bearish sentiment is above its historical average of 31.0% for the 45th time in 47 weeks.

Bullish sentiment, or expectations that stock prices will rise over the next six months, edged down 0.4 percentage points to 44.1%. Bullish sentiment is above its historical average of 37.5% for the third time in six weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, dipped 2.2 percentage points to 22.7%. Neutral sentiment is below its historical average of 31.5% for the 74th time in 76 weeks.

With these changes, the bull-bear spread decreased 3.1 percentage points to 10.9% from 14% last week. The bull-bear spread is above its historical average of 6.5% for the seventh time in 46 weeks.

In this week's special question, AAII asked its members how the rise of passive investing (index funds/ETFs) has affected their investing strategy.

Here is AAII's graphic showing how they responded:

(Terence Gabriel)

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