Half of Investors Would Increase Stock Allocations If Prices Decline

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Last month’s Asset Allocation Survey special question asked AAII members what would prompt them to increase their allocations to stocks. Nearly half of all respondents (44%) said a decline in stock prices and/or a pullback in valuations would prompt them to allocate more to stocks. Many in this group said they are waiting for a correction or bear market to occur. Slightly more than 36% of all respondents said they were either happy with their current allocation or were otherwise fully allocated to stocks relative to their age and/or strategy. Approximately 14% are looking to Washington D.C., particularly for progress on tax reform. About 8% of respondents say change in interest rates and/or the economy would be required for them to boost their equity allocations.

Here is a sampling of the responses:

  • “A significant stock market correction.”
  • “Nothing, as I’m currently heavily weighted in equities.”
  • “Valuations are getting ‘frothy.’ A 10% to 15% correction would grab my interest again.”
  • “Nothing, because at my age, I need to keep some money in bonds.”
  • “Passage of tax reform and tax cuts.”

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