Friday, November 14, 2014

Individual Investors Becoming Too Bullish?

Yesterday the American Association of Individual Investors released their weekly sentiment survey. As the below chart clearly indicates, individual investors have certainly become more bullish. Some highlights from this week's survey report.
  • Bullish sentiment of 57.91% is a high for this year.
  • The bull/bear spread of 38.6% is at a high for the year and above the average plus one standard deviation totaling 26.8%.
  • Since mid October when the bullish sentiment fell to 35.42%, the S&P 500 Index is up over 9%.
From The Blog of HORAN Capital Advisors
Source: AAII

As noted in prior sentiment posts, these type of behavioral indicators are most predictive at their extremes.

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