AAII Sentiment

History

What the AAII Sentiment is

Every week the American Association of Individual Investors asks its members a single question: over the next six months, do you expect the stock market to be up, flat, or down? The answers come back as three percentages — bullish, neutral, bearish — and the survey has run continuously since 1987.

This page tracks the bull-bear spread: bullish percent minus bearish percent. One signed number captures both tails at once. Above zero the membership is net optimistic; below zero, net pessimistic.

How it is built

AAII publishes the results each Wednesday evening. DeepValues reads the weekly print and accumulates the history, because AAII's public page only shows a rolling five-month window — the long series is what makes a percentile reading possible.

The distribution statistics quoted on this page (mean near +6.5, standard deviation near 17) come from the full 1987-to-present survey, not from the short public window. AAII members lean optimistic on average, which is why the neutral band is centred slightly above zero rather than on it.

Source: AAII Sentiment Survey · series page

How to read it

Below −20 is capitulation, −20 to −10 bearish, −10 to +10 neutral, +10 to +20 bullish, and above +20 euphoric.

The reading is conventionally used backwards. Extreme pessimism has historically clustered near lows and extreme optimism near highs, so a capitulation print is read as constructive and a euphoric print as a caution. The logic is not mystical: someone who has already sold in fear has no more stock to sell, and someone fully invested in euphoria has no more cash to buy with.

Single weeks are noise. The signal, such as it is, lives in multi-week extremes — several consecutive prints beyond ±20 rather than one.

What it does not tell you

This is a survey of a self-selected group of retail investors who opted into a membership organisation and then opted into answering. It is not a census, it is not position-weighted, and what people say is not what they have done. Sentiment surveys and actual fund flows routinely disagree.

The contrarian relationship is also weak and unstable. It has worked at genuine extremes and produced nothing useful in between, and sample sizes in any given week are small enough that a few hundred responses move the number. Treat it as texture on top of a valuation view, never as a reason to act on its own.

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