Half of Investors Not Changing Their Bond Allocation During Pause in Rate Hikes

Last month’s Asset Allocation Survey special question asked AAII members how the Federal Reserve’s pause in raising interest rates is influencing what income-producing investments they buy. Slightly less than half of respondents (44%) say the decision to postpone future hikes for now is either not having any influence or has not caused them to make any changes. Slightly more than 16% say they are buying more stocks, particularly dividend-paying stocks. Approximately 11% say they are buying more bonds or bond funds.

Here is a sampling of the responses:

  • “Bonds are looking attractive for sustained income during a potentially flat year.”
  • “I’m increasing my portfolio exposure to intermediate-duration bond funds and dividend-growth equities, while decreasing non-dividend growth equities and cash.”
  • “I am more comfortable with intermediate-term bond funds, real estate investment trusts (REITs) and dividend-paying stocks.”
  • “Very little; I buy stocks with good prospects which pay dividends. I reinvest the dividends. I try to avoid depending on news of the macroeconomic world.”
  • “While I favor the pause, it has had no effect on my investment strategy.”

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