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.”