Falling Interest Rates Not Impacting AAII Members’ Portfolios


August’s AAII Asset Allocation Survey special question asked AAII members, how, if at all, this year’s drop in interest rates has impacted their portfolio allocations. More than half of respondents (56%) said the drop has not had any impact on their portfolios. Some of these respondents said they were out of bonds or that they have not noticed a change in their allocations. An additional 8% said the pullback in interest rates has either had “little” or “not much” impact. About 9% of respondents said they have bought stocks and/or real estate investment trusts (REITs) in response to the falling interest rates. Fewer than 5% of respondents said that they’ve boosted their cash allocations.

Here is a sampling of the responses:

  • “Not at all. I was already fully invested in stocks.”
  • “I’m not interested in bonds with interest rates so low.”
  • “I stick to my target allocations, so interest rate variations are largely ignored unless swift and severe.”
  • “Normally I would reduce bond exposure and increase stock exposure, but the projected future stock yields have decreased as well.”
  • “No effect. I continue to buy value and dividend stocks.”

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