From the latest AAII, after a terrible 2022 and not so great first 10 months of 2023, optimism is back.  

Thursday, January 25, 2024

Optimism Among Individual Investors Bounced Back Last Year

Optimism among individual investors in our weekly AAII Sentiment Survey bounced back in 2023. The improvement came in June 2023 as bullish sentiment ended what had been a nearly perfect 18-month streak of below-average optimism. Though AAII members felt generally more upbeat about the short-term outlook for stocks during the second half of 2023—and so far into this year—last year still ranked below average overall. The average bullish sentiment reading in 2023 was 34.7%. This is the 26th-lowest annual average in the survey's 37-year history.

You wouldn't be able to tell this from our Asset Allocation Survey. Equity allocations among surveyed AAII members averaged 65.6% in 2023. This ranks as the 13th-highest average exposure to stocks and stock funds over the past 37 years. The differences between the two surveys tie back to a point I regularly reiterate: Individual investors' short-term expectations for how the stock market will perform rarely go hand in hand with their portfolio allocations. Even with the end of the bear market and the subsequent rebounds in stock prices and optimism, average annual equity allocations were nearly unchanged between 2022 and 2023.

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