Three Out of Five Have an Overweighting to Stocks Given Their Age


Last month’s Asset Allocation Survey special question asked AAII members whether they think they are overweighting or underweighting stocks relative to their age. Nearly three out of every five respondents (59%) said they are overweighting stocks. The higher returns realized by stocks, especially relative to bonds, were cited by many of these respondents. Others listed dividend income and AAII founder and chairman James Cloonan’s book, “Investing at Level3” as the reason for their overweight positions in stocks. About 18% believe they are appropriately weighted to stocks. Nearly 17% described themselves as being underweight. Concerns about prevailing valuations, a forthcoming drop in stock prices and Washington politics were given as reasons.

Here is a sampling of the responses:

  • “Overweighting. Returns are much better than bonds.”
  • “At age 70, I believe I’m just right with my asset allocation given my tolerance for risk.”
  • “Underweight, but I’m preparing for a downturn in the market.”
  • “Overweighting. Probably taking more risk than necessary.”
  • “Overweighting. I’m 78 and feel that I have enough liquid reserves to get me through a typical market pullback or even a normal bear market.”

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