Majority of Investors are Currently Overweight in Stocks


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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