It has been two months since the Australian Investors' Association (AIA) in conjunction with FNArena announced the results of their two-monthly Australian Investors Sentiment Survey. Back in July, the survey showed sentiment was improving and now in September, confidence levels amongst Australian investors have continued to recover, with optimism, if anything, gathering speed. Although, it is important to note that despite improving sentiment, there are still many in the undecided category Portfolio allocations to cash still remain high.

The proportion of respondents that admit to having a Bearish attitude to investment markets has more than halved since May. 21% of those surveyed are now bearish versus 57% just four months ago. 59% identify as being Neutral, while 20% of respondents are now Bullish on investment markets. This latter read was at just 11% in July and just 7% in May.

Last time the survey generated a positive bias from 20% of respondents was in March 2011.

More than 45% of the survey respondents are positive on a longer-term outlook, expecting equities markets to be higher in six months time. This compares to just 33% in May and 39% in July.

25% of respondents do not expect higher markets in six months, compared to 43% in May, while 29% are expecting maintenance of the status quo. The decrease in those negative on a