Inflation, rising rates, war, pandemic — not much to be optimistic about.
Investors agree — less than 20% are bullish right now.
What does this mean for the stock market?
To help answer that question, today’s chart presents six bullish sentiment ranges versus the ensuing average S&P 500 three-month gain.
Conclusion…
The stock market has performed better following relatively low optimism.
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 bulls?
The highest percentage of AAII bullish sentiment was 75% and occurred on January 6, 2000 right at the peak of the dot-com bubble.
What was the lowest percentage of AAII bulls?
The lowest percentage of AAII bulls was 12% on November 16, 1990.