Over Half of Surveyed Investors’ Allocations Unaffected by Rate Hikes


Last month’s Asset Allocation Survey special question asked AAII members to describe the impact that the Federal Reserve’s rate hikes are having on their asset allocation decisions. More than half of all respondents (57%) said that the rate hikes are either not affecting or are only having a minimal impact on their allocation decisions. Among the reasons given were the small size of the rate hikes, expectations for rates to be raised and a greater focus on the Trump administration’s policies. Slightly more than 11% said that they are allocating more to fixed income, particularly short-term bonds and bond funds. About 10% said that they are reducing their exposure to equities, while 8% are reducing their exposure to or are purposely avoiding bonds and bond funds. About 8% of respondents are increasing their cash allocations.

Here is a sampling of the responses:

  • “None, as long as the hikes are minimal and spread out.”
  • “Slightly reducing my stock funds (risk) and slightly increasing my bond fund allocation.”
  • “If 0.25% and invoked gradually, I will maintain my current allocation rebalancing as is necessary.”
  • “It makes it easier to allocate funds to bond-like assets.”
  • “Very little. I’m much more concerned about upcoming events in the Trump Administration’s interaction with Congress over the next one to two years.”
  • “Holding cash instead of bonds until Fed normalizes interest rates.”

Want to weigh in? Take the survey yourself and see results online at http://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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