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October AAII Asset Allocation Survey: Cash at Lowest Level Since the Summer

Last month, cash allocations among individual investors fell to their lowest level since the summer. The October AAII Asset Allocation Survey also shows a rebound in fixed-income allocations and a decline in equity allocations.

Stock and stock fund allocations declined 0.7 percentage points to 68.0%. Equity allocations were last higher in June 2017 (68.8%). October was the 55th consecutive month that equity allocations were above their historical average of 60.5%.

Bond and bond fund allocations rebounded by 1.8 percentage points to 16.9%. The historical average is 16.0%.

Cash allocations fell 1.0 percentage points to 15.1%. Cash allocations were last lower in July 2017 (14.5%). October was the 71st consecutive month that cash allocations were below their historical average of 23.5%.

This is the first time since February and March 2015 that equity allocations have equaled or exceeded 68.0% in consecutive months. Fixed-income allocations have been above their historical average three times and below their historical average three times over the past six months. The range for fixed-income allocations over this period of time has been from 15.0% (June) to 17.7% (July).

Optimism about the short-term direction of the stock market hovered around its historical average through October in our weekly Sentiment Survey. Yields on the benchmark 10-year Treasury continued to rise (albeit modestly) last month. Differences in which AAII members take the survey from month to month can also influence the results.

October AAII Asset Allocation Survey results:

  • Stocks and stock funds: 68.0%, down 0.7 percentage points
  • Bonds and bond funds: 16.9%, up 1.8 percentage points
  • Cash: 15.1%, down 1.0 percentage points

October AAII Asset Allocation Survey details

  • Stocks: 30.8%, up 0.5 percentage points
  • Stock funds: 37.3%, down 1.2 percentage points
  • Bonds: 3.0%, up 0.4 percentage points
  • Bond funds: 13.8%, up 1.3 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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