Investors Are Feeling Bearish…Again

One of the most closely watched sentiment surveys, the AAII (American Association of Individual Investors) Sentiment Survey, shows individual investors have remained more bearish than bullish for the fifth consecutive week.

When everyday investors become overwhelmingly pessimistic, it’s easy to assume the market is headed lower. But sentiment tells us how people feel—not necessarily what the market will do next.

History has shown that investor sentiment can often become most negative near market lows, while optimism tends to peak closer to market highs.

Does the President Determine Market Returns?

With politics constantly dominating the news, many investors wonder whether the party in the White House determines stock market performance.

The historical evidence says not really.

The relationship between who occupies the Oval Office and long-term stock market returns is surprisingly weak. Markets have delivered strong gains—and experienced difficult periods—under both Republican and Democratic administrations.

What has shown a much stronger relationship with stock prices?

Corporate earnings.

Over time, stock prices tend to follow the growth of the businesses they represent. When companies consistently increase their profits, stock prices generally follow. While elections, headlines, and policy changes may create short-term volatility, earnings growth has historically been the more reliable driver of long-term market performance.

The takeaway: Ignore the daily political noise. Stay focused on what ultimately matters most—strong businesses, growing earnings, and a disciplined long-term investment strategy.

Disclaimer: This content is for educational and informational purposes only and should not be considered investment advice or a recommendation to buy or sell any security. Investing involves risk, including loss of principal. Advisory services offered through BF/Anderson & Co.