May’s Asset Allocation Survey special question asked AAII members if, given $50,000, how they would invest it today. Nearly two-thirds of respondents (65%) said stocks or stock funds. Dividend-paying stocks were a particular favorite, picked by more than 11% of all respondents. Nearly 20% said they would keep some or all of the amount in cash. About 17% said they would buy bonds or bond funds. Several respondents listed more than one investment or asset class.
Though optimism about the short-term direction of the stock market fell to extraordinarily low levels during the latter part of May, many individual investors feel the alternatives aren’t any more attractive. Continued low bond yields and low interest rates on money market and bank savings accounts continues to be a source of frustration for many individual investors.
Here is a sampling of the responses:
- “Dividend-paying stocks. Better returns than CDs or bank interest rates.”
- “Stocks. They have the best and highest long-term returns.”
- “Bonds, dividend stocks and cash. Even though the returns should be lower, I don’t believe the volatility will be as great.”
- “Cash. The markets are pretty high and the world economy is unstable.”
- “Cash, gold: 40%; stock and stock funds: 30%; real estate: 30%; spread the risk in case of a big market crash.”
Want to weigh in? Take the survey yourself and see results online at: http://www.aaii.com/assetallocationsurvey.
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