Sentiment Update: Individual Investors Remain Bullish

By Seeking Delta of

The NAAIM (active money managers) survey for this week showed a modest decrease in bullish sentiment while the AAII (individual investors) survey showed a modest increase in bullish sentiment.

naaim sentiment survey and returns of the s&p 500

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This week, active managers have, on average, a 62% allocation to equities. This is down from 67% last week. The median allocation fell to 82% while the top quartile of active managers have an allocation of 100% or greater to equities with the bottom quartile at a 50% or less equity exposure. The eight week moving average is now at 67%.

The NAAIM number measures current equity exposure (0% would be all cash, 100% fully invested). Additional detail can be found here.

aaii investor sentiment percentage bullish

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Individual investor’s sentiment has now increased for three consecutive weeks. Bearish sentiment also increased slightly to 26% from last week’s reading of 25% which means the large increase in bullish sentiment came from a decrease in neutral sentiment. The Bull-Bear spread is at 24% and the eight week moving average is at 49%.

aaii investor sentiment percentage bullish

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Individual investor sentiment is now just below the “extreme” territory; measured as one standard deviation above average.

For analysis of the subsequent equity returns based on sentiment surveys please see the flowing links. AAII research here and NAAIM research here.

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