Each month since January 2015, myICLUB.com asks its users to indicate their outlook for the stock market in the coming twelve months. The above graph plots the bullish, neutral, and bearish sentiment recorded by investment club members over time, and compares those results to the forward twelve-month (FTM) percentage change of the S&P 500 Index.

To interpret the graph, note a particular month’s bullish (in blue) or bearish (in green) sentiment, and then note the percentage change of the S&P 500 (in orange) over the next twelve months. If bullish sentiment was at a relatively high level, and market returns over the next twelve months were also high, then a case could be made that participants were directionally correct at the time they indicated their outlook. If bullish sentiment was at a relatively low level, and market returns over the next twelve months were high, then a case could be made that participants were not very accurate in their outlook.

Note that the “FTM S&P 500” returns will always trail the current month by one-year since a full twelve-month period is required to calculate the percentage change in the index.