Nearly Half of Investors Would Allocate New Money to Stocks and Stock Funds

Last month’s Asset Allocation Survey special question asked AAII members which asset class they would allocate to if they could (or did) add new money to their investment accounts. More than a third of all respondents (36%) say stocks. Dividend stocks are specifically mentioned by many, but certainly not all, of these respondents. An additional 11% of respondents say they would buy equity funds. Nearly 32% of respondents say they would buy bonds or bond funds, primarily for personal allocation reasons. Approximately 23% of respondents say cash or money market funds. Many of these respondents anticipate a pullback in stock prices and are either seeking safety or want to build reserves to buy stocks with at lower prices.

Here is a sampling of the responses:

• “Stocks; long-term, they will outperform all other asset classes.”
• “Bonds, mostly corporate. I’m underweighted in bonds and am getting into my late 50s.”
• “Cash. I want to have dry powder to buy more stocks when the next correction comes.”
• “Dividend growth stocks. They are better than certificates of deposit (CDs) and can grow in price and yield.”

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