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We've touched on the AAII survey several times in recent months, noting how these investors were not buying into the rally. Far from it. In the past, we've looked at the implied demographics of the survey, and it seems pretty clear that they skew heavily to the older end of the population.
Maybe that's why a massive tech-led rally hasn't excited them as much as rallies in the past. Whatever the reason, such a low level of optimism has rarely been to their benefit.
Backtests show that the S&P 500 has rallied 93% of the time over the next three months when fewer than 20.5% of respondents considered themselves bullish on the market.
We've never seen a rally this large, over this long of a period, and still had so few investors consider themselves bullish.