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November AAII Asset Allocation Survey: Lowest Level of Cash Since 1999

Individual investors’ cash allocations fell last month to a level not seen in 18 years. At the same time, the November AAII Asset Allocation shows a rebound in both equity and fixed-income allocations.

Stock and stock fund allocations rebounded by 0.6 percentage points to 68.6%. Equity allocations were last higher in June 2017 (68.8%). November was the 56th consecutive month that equity allocations were above their historical average of 60.5%.

Bond and bond fund allocations rose 0.7 percentage points to 17.6%. This is the largest allocation to fixed-income since April 2017 (18.0%). The historical average is 16.0%.

Cash allocations fell 1.2 percentage points to 13.9%. Cash allocations were last lower in December 1999 (12.0%). November was the 72nd consecutive month that cash allocations were below their historical average of 23.5%.

Cash allocations have been mostly lower this year than they were last year. Year to date, cash allocations have averaged 16.0% versus 18.5% for all of 2016.

The reduction in cash allocations is occurring as equity allocations are higher. Last month marked the first time that equity stock and stock funds allocations have equaled or exceeded 68.0% in three consecutive months since September 2000.

The record highs realized by the indexes have boosted the value of stock holdings. Optimism about the short-term direction of the stock market has not soared in response, however. Rather, bullish sentiment mostly stayed below its historical average throughout November, according to our weekly AAII Sentiment Survey.

November AAII Asset Allocation Survey results:

  • Stocks and stock funds: 68.6%, up 0.6 percentage points
  • Bonds and bond funds: 17.6%, up 0.7 percentage points
  • Cash: 13.9%, down 1.2 percentage points

November Asset Allocation Survey details:

  • Stocks: 29.0%, down 1.7 percentage points
  • Stock Funds: 39.5%, up 2.3 percentage points
  • Bonds: 3.9%, up 0.9 down percentage points
  • Bond Funds: 13.7%, down 0.2 percentage points

Historical Averages:

  • Stocks/Stock Funds: 60.5%
  • Bonds/Bond Funds: 16.0%
  • Cash: 23.5%

*The numbers are rounded and may not add up to 100%.

The AAII Asset Allocation Survey has been conducted monthly since November 1987 and asks AAII members what percentage of their portfolios are allocated to stocks, stock funds, bonds, bond funds and cash. The survey and its results are available online at: www.aaii.com/investor-surveys.

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/assetallocationsurvey.

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership.

 

 

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