Retail Investor Optimism Climbs After Autumn Dip, AAII Survey Finds

The American Association of Individual Investors (AAII) reports that retail investor sentiment is recovering after notable pullbacks in mid-October and mid-November, signaling renewed confidence among individual market participants.

Who, What, When, Where

AAII, a nonprofit organization founded in 1978 and headquartered in Chicago, publishes a weekly sentiment survey in which its members classify their outlook for the U.S. stock market as bullish, bearish, or neutral. The latest data show a rebound in bullish responses following declines recorded on October 15 and November 12. The survey focuses exclusively on U.S. individual investors and is released every Thursday after the market closes.

How the Survey Works

Each week, AAII members answer a single question: where do you believe the stock market will be six months from now? Participants choose one of three options—bullish, bearish, or neutral—allowing AAII to gauge aggregate retail sentiment. According to the association, the poll typically receives several hundred to a few thousand responses, providing a broad snapshot of individual investor expectations.

Long-Term Sentiment Averages

Over the long run, the survey shows that 37.5% of respondents identify as bullish, 31.5% as neutral, and 31.0% as bearish. These figures serve as benchmarks for measuring how current sentiment deviates from historical norms. When bullishness rises far above the 37.5% average, institutional strategists often interpret the shift as a potential warning of excessive optimism. Conversely, unusually high bearish readings can be viewed as a sign of capitulation among non-professional investors.

October Decline

On October 15, 2025, bullish sentiment fell to roughly 34%, while bearish sentiment climbed to about 46%. The drop coincided with what many market watchers described as the first cracks in the year’s artificial-intelligence-driven equity rally. Concerns that high-growth technology stocks had become overextended prompted a rotation into less volatile sectors, undermining confidence among retail investors.

November Weakness

The downturn deepened on November 12, 2025, when bullish sentiment slipped below 32% and bearish sentiment rose to approximately 49%. At that time, expectations for a potential Federal Reserve rate cut in December faded, adding pressure to equity valuations and reinforcing pessimism among survey participants.

Current Recovery Trend

Since mid-November, AAII’s data indicate a gradual improvement in optimism. Although the association has not disclosed the exact percentage for its most recent reading, leadership described the move as a “recovery trend.” Retail investors appear to be reassessing macroeconomic risks, including interest-rate policy and earnings forecasts, with more balanced outlooks than those recorded during the autumn lows.

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Institutional View of Retail Sentiment

Professional investors have historically used retail sentiment as a contrarian indicator, reasoning that individuals tend to become most optimistic near market peaks and most pessimistic near troughs. That stance, however, faces new challenges. Rising balances in 401(k) and IRA plans, widespread access to low-cost digital brokerage platforms, and faster dissemination of data have collectively increased the influence of individual investors on overall market liquidity. Episodes of coordinated buying in so-called “meme” stocks have further underscored their growing market presence.

Why the Data Matter

The AAII survey offers a consistent, decades-long record of individual investor expectations, making it a valuable tool for examining shifts in retail psychology. When combined with other indicators—such as institutional positioning, economic releases, and central-bank guidance—the data help analysts assess whether prevailing market sentiment aligns with underlying fundamentals.

For readers seeking the latest numbers, AAII publishes its full weekly breakdown on its website, aaii.com, shortly after market close each Thursday.

Crédito da imagem: American Association of Individual Investors