AAII Asset Allocation Survey: Stock Allocations Drop to 12-Month Low


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Equity allocations among individual investors fell to their lowest level in a year. Equity allocations specifically declined to a level not seen since February 2021. Meanwhile, cash allocations increased for the third month in a row.

Equity and equity fund allocations fell 1.1 percentage points to 68.5% in February. Equity exposure was last reduced in February 2021 (67.7%). Nonetheless, last month was the 21st month in a row that AAII members’ exposure to equities was above the historical average of 61.0%.

Bond and bond fund allocations increased by 0.4 percentage points to 14.7%. Allocations were last higher in October 2021 at 15.1%. Even with this increase, exposure to fixed income securities was below its historical average of 16.0% for the 12th consecutive month.

Cash allowances increased by 0.6 percentage points to 16.7%. They were last higher in November 2020 (18.4%). February was the 22nd consecutive month that cash allocations were below their historical average of 23.0%.

Although equity allocations have retreated, they have only retreated to the upper end of the typical historical range. The breakpoint between typical and unusually high equity allocations is 69.0%.

Equities have not had a fruitful 2022 so far, with multiple issues in supply chains, inflation, interest rates and now the conflict in Ukraine. The main stock market indices hit their lowest levels in 2022 at the end of February.

Individual investor optimism about the near-term direction of the stock market fell to its 29th lowest level in AAII Sentiment Survey history in mid-February. Last week, pessimism hit its highest level in nearly nine years. Nonetheless, low yields, expectations of an interest rate hike by the Federal Reserve, and a long-term approach to investments by AAII members are keeping equity allocations at above-average levels.

February AAII Asset Allocation Results:

  • Stocks and equity funds: 68.5%, down 1.1 percentage points
  • Bonds and bond funds: 14.7%, up 0.4 percentage points
  • Cash: 16.7%, up 0.6 points

February AAII Asset Allocation Details:

  • Equities: 30.8%, down 2.0 percentage points
  • Equity funds: 37.7%, up 0.9 percentage points
  • Bonds: 2.2%, no change
  • Bond funds: 12.6%, up 0.5 percentage points

Historical averages:

  • Stocks/stock funds: 61.0%
  • Bonds/Bond Funds: 16.0%
  • Cash: 23.0%

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, equity funds, bonds, bond funds and cash. The survey and its results are available online at: https://www.aaii.com/investor-surveys.


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