Bridge over ocean
1 March 2000 Financial Analysts Journal Volume 56, Issue 2

Investor Sentiment and Stock Returns

  1. Kenneth L. Fisher
  2. Meir Statman, PhD

Investors are not all alike, and neither are their sentiments. We show that the sentiment of Wall Street strategists is unrelated to the sentiment of individual investors or that of newsletter writers, although the sentiment of the last two groups is closely related. Sentiment can be useful for tactical asset allocation. We found a negative relationship between the sentiment of each of these three groups and future stock returns, and the relationship is statistically significant for Wall Street strategists and individual investors.

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