Survey: Individual Investors Turn More Bullish on Stocks

The stock market rebounded in the week ended Oct. 22, and so did the sentiment of individual investors, according to a survey by the American Association of Individual Investors (AAII) taken during that period.

A total of 49.7 percent of respondents were bullish about stocks for the next six months, the highest level since late August and up from 42.7 percent a week earlier.

The portion who were bearish plunged to 22.5 percent from 33.7 percent. The neutral category registered 27.8 percent, up from 23.6 percent.

Individual investors "viewed the recent downward volatility as a buying opportunity," Charles Rotblut, AAII Journal editor, said in a statement.

"The pullback in the S&P 500 and the correction in the Russell 2000 made valuations more attractive and helped to alleviate concerns about stock prices having moved too far upward too fast."

The S&P 500 index dropped 9.8 percent from its Sept. 19 record high to its Oct. 15 trough. It has recovered 7.7 percent since then.

Strong third-quarter earnings reports are buttressing stocks.

"The fear was that there was a global [economic] pullback, and it would spread," Joe Fath, manager of T. Rowe Price Growth Stock Fund, told The Wall Street Journal. "But this quarter’s earnings and [management] commentary has been reassuring."

Of the S&P 500 companies that have reported earnings so far, 79 percent beat analysts’ profit forecasts and 60 percent topped sales estimates, according to Bloomberg.

Related Stories:

• Investors Sour on Dollar After Strong Rally
• Birinyi: 'We Aren't Sure What's Happening' With Stocks