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Half of Investors Would Increase Stock Allocations If Prices Decline

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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