AAII Asset Allocation Survey: Equity Allocations at Highest Level Since 2007


Individual investors put the largest proportion of their portfolios into equities last month since 2007, according to the December AAII Asset Allocation Survey. Equity allocations exceeded 68%, while cash allocations fell to their lowest level since at least 2000.

Stock and stock fund allocations rose 1.3 percentage points to 68.5%. Equity allocations were last higher in June 2007 (68.6%). Last month’s increase puts stock and stock fund allocations at or above their historical average of 60% for the 21st consecutive month and the 23rd out of the past 24 months.

Bond and bond fund allocations rebounded by 0.8 percentage points to 16.8%. The increase keeps fixed-income allocations at or above their historical average of 16% for the seventh consecutive month.

Cash allocations fell by 2.0 percentage points to 14.8%. As noted above, the drop puts cash allocations at their lowest level since at least 2000. (The allocation numbers were rounded prior to May 2000.) Last month’s drop kept cash allocations below their historical average of 24% for the 37th consecutive month.

The unusually high allocation to stocks coincided with new record highs being set by large-cap stocks. At the same time, optimism about the short-term direction of stocks prices mostly stayed above average throughout the month of December. Many AAII members also continued to be frustrated by low bond yields and low interest rates on money market accounts.

December AAII Asset Allocation Survey results:

  • Stocks and Stock Funds: 68.5%, up 1.3 percentage points
  • Bonds and Bond Funds: 16.8%, up 0.8 percentage points
  • Cash: 14.8%, down 2.0 percentage points

December AAII Asset Allocation Survey details:

  • Stocks: 32.2%, up 0.5 percentage points
  • Stock Funds: 36.3%, up 0.8 percentage points
  • Bonds: 3.4, down 0.1 percentage points
  • Bond Funds: 13.3%, up 0.8 percentage points

Historical Averages:

  • Stocks/Stock Funds: 60%
  • Bonds/Bond Funds: 16%
  • Cash: 24%

*The numbers are rounded and may not add up to 100%.

The AAII Asset Allocation Survey has been conducted monthly since November 1987 and asks AAII members what percentage of their portfolios are allocated to stocks, stock funds, bonds, bond funds and cash. The survey and its results are available online at: http://www.aaii.com/investor-surveys.


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