Inflation, rising rates, war — not much to be optimistic about.
Investors agree — more than 60% are bearish right now.
What does this mean for the stock market?
To help answer that question, today’s chart presents five bearish sentiment ranges versus the ensuing average S&P 500 six-month gain.
Conclusion…
The stock market has performed better following relatively high pessimism.
On average.
What is the meaning of investor sentiment?
Investor sentiment refers to the average outlook investors have towards a particular market or security.
What was the highest percentage of AAII bears?
The highest percentage of AAII bearish sentiment was 70% and occurred on March 5, 2009 near the end of the financial crisis bear market.
What was the lowest percentage of AAII bears?
The lowest percentage of AAII bears was 6% on August 21, 1987 shortly before the stock market crash of October 1987.