Sentiment Overview: Week Of January 8th, 2010 Sentiment...

Sentiment Overview: Week Of January 8th, 2010

Sentiment Surveys
The weekly survey of retail US investors from AAII shows the bulls decreased from 49% to 41% and the bears increased slightly from 23% to 26%. While this is an amelioration of the extreme reading from last week, it is still quite elevated.

There is a peculiar disconnect between this quantitative measure and more anecdotal evidence of sentiment. For example, there are stories like this (pointed out by a reader) all over the media which shows the average US investor far too distrustful of the stock market and happy to seek sanctuary in bonds, as they have for most of last year.

But what is most interesting this week from the AAII survey is not the sentiment data but the shift in asset allocation. Amazingly, the average AAII investor increased their exposure to the stock market by +15% points to 64%. That is the highest level since, you guessed it, October 2007. The rest is equally divided between cash and bonds.

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