The 2025 Market in the Eyes of AI: Human Investors Are Too Pessimistic, Believing They Have Evolved, Yet Their Behavioral Patterns Remain the Same

According to the Wind Trading Platform, Deutsche Bank recently released a report in which its artificial intelligence system dbLumina conducted a "ruthless" analysis of market sentiment for 2025. The conclusion is straightforward and heart-wrenching: From the perspective of AI, human investors are overly pessimistic, and their investment behavior is filled with irrationality, emotionality, and cognitive biases. Despite investors believing they have evolved and are in a "new investment world," their behavioral patterns and psychological traps are strikingly similar to the past.

The core insights of this report for investors can be summarized as follows:

• Ironclad Evidence of Contrarian Investing: AI confirms that investors exhibit the most extreme "irrationality" (i.e., fear) at the market's lowest point (April 2025). The contrarian approach, which is to be greedy when others are fearful, has proven to be an absolutely correct strategy this year.
• "Euphoria" Signal at the Peak of Fear: The most shocking finding is that AI only identified "euphoria" sentiment during the most severe market sell-off in April and May, when fear reached its peak. This became a perfect buy signal, indicating that some investors panic-bought back positions after excessive selling.
• Illusion of Evolution: Investors generally believe that "the world has changed," but AI analysis shows that the market is still dominated by outdated cognitive traps such as "recency bias" and "availability heuristic." This means that investors are still trading based on the latest news and emotions, without truly evolving.
• Lagging Human Emotions: The emotion index generated by AI is almost always more optimistic than surveys of U.S. retail investors and rebounds faster after market declines. This indicates that AI can "see through" short-term panic, while human investors remain trapped in it. Following short-term emotions to sell during market fluctuations has been a losing strategy this year.

Deutsche Bank's research method involved inputting its daily market commentary from January to October 2025 into its proprietary AI system dbLumina and asking it to quantify market psychology. One key analysis was the "Rationality/Fear Index," which scores from -1.00 to +1.00, with negative scores indicating a market tendency toward fear and excessive reactions to external negative factors.

The results show that investors were in a state of "irrationality" for the vast majority of 2025. The index hit its lowest point in April when the market was in the depths of panic selling. Ironically, AI accurately pointed out this "irrationality"—since the low point in March, the S&P 500 index has rebounded significantly by 23%, confirming the correctness of AI's judgment at that time.

The report also discovered an intriguing trend: as time passes and market uncertainty decreases, the level of "rationality" among investors improves. This reveals a harsh truth: investors can only behave more rationally during calm and inconsequential times; once uncertainty arises, they immediately revert to fear and instinctive overreactions.

The Paradox of Emotion: "Euphoria" After Panic Selling, Greed Disappears in the Rebound

When dbLumina was asked to analyze the four core emotions in the market—fear, greed, euphoria, and anxiety—the results were filled with contradictions and paradoxes.

The dominant emotion throughout the year is "anxiety." This emotion lingers regardless of whether the market is rising or falling.

However, the most critical finding occurred at the market bottom. AI analysis revealed that the "euphoria" emotion appeared only once this year, precisely during the most severe market sell-off in April and May. The report speculates that this may be due to some investors rushing back into the market after panic selling. This "euphoria" signal, which flashed at the peak of fear, represents the best buying opportunity.

Another anomaly is that after the market plummeted in April, despite the stock market steadily recovering and reaching new highs, investors' "greed" sentiment declined, while "anxiety" sentiment increased. This completely contradicts the rational logic of "buy low, sell high," reflecting a typical retail investor mentality of "the more it rises, the more afraid I become." The "fear of missing out" was also rare, appearing only briefly during the hot market in February.

Cognitive Bias: Driven by Short-Term Events

In 2025, a phrase frequently repeated by investors is: "We are operating in a brand new investment world." However, AI's analysis ruthlessly shatters this illusion.

The report points out that the two major cognitive biases dominating the market this year are "recency bias" and "availability heuristic." This means that what investors call a "new world strategy" is merely relying on the information they have recently seen or heard to make decisions, which is no different from past erroneous patterns.

AI categorizes the psychological evolution of investors in 2025 into three stages: from a "high sensitivity" to geopolitical issues and interest rates at the beginning of the year, to an "increased resilience" to trade wars mid-year, and finally to a "normalized acceptance" of uncertainty later on. But at its core, it remains a reactionary behavior driven by short-term events.

Misinterpreted Fear: AI is More Optimistic than Humans

AI also found that the focus of investors does not completely match the actual fears driving the market. For example, Deutsche Bank's comments mentioned the labor market 61 times throughout the year, but AI analysis shows that the labor market never entered the top three fears of investors in any month. Investors are confused by the "fear" they have created for themselves.

More compellingly, when comparing the emotional index generated by dbLumina with the net bullish data from the American Association of Individual Investors, a clear picture emerges: AI's emotional indicators were almost consistently more optimistic than human investors throughout 2025, especially during and after the turmoil in April.

The AI emotional index rebounded much faster than the stock market itself after the market hit bottom, indicating that it can recover more quickly from short-term negative events. For investors, this means that maintaining calm and ignoring noise when the market drops due to short-term shocks is a wiser choice. As the report summarizes: Selling due to short-term declines this year was the wrong behavior.