Majority of Investors are Currently Overweight in Stocks

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Last month’s Asset Allocation Survey special question asked AAII members if they think they personally are overweighting or underweighting stocks relative to their age. Three-fifths of respondents (60%) describe themselves as being overweight in stocks. Among the reasons given were a desire for higher returns, a lack of need for income and long investing horizons. Conversely, a little more than 25% say they are underweight in stocks, primarily out of concern for valuations and/or potential losses. Approximately 15% describe their allocations as being about right.

Here is a sampling of the responses:

  • “Since I don’t need to live off of my investments, I have a lot invested in assets deemed a little riskier for a 78-year-old.”
  • “Overweighted in stocks by general standards. I’m willing to gamble because I’m wary of bonds right now.”
  • “I am underweighting stocks because I feel they are overvalued.”
  • “I am about right. I have sufficient cash funds for a few years and some bonds. I like the rest in stocks for potential growth.”
  • “Overweighting in an effort to get higher returns for my retirement.”

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