One-Third of Investors Would Increase Allocation to Stocks If Prices Dropped Enough

Last month’s Asset Allocation Survey special question asked AAII members what would prompt them to increase their allocations to stocks. Almost a third of all respondents (32%) say a drop in prices, with many seeking a drop of at least 10% to create a buying opportunity. About 11% want to see an improvement in global economic growth and/or a drop in interest rates. A trade deal between the U.S. and China would encourage 5% of respondents to increase their exposure to stocks. Almost 3% cite a change in U.S. politics and a similar amount say they would allocate more to stocks if they were younger. A sizeable number of respondents (33%) say they wouldn’t increase their allocation to stocks, primarily because of their current exposure levels to equity.

Here is a sampling of the responses:

• “A stock market correction would be used to increase my allocation. At current levels, I am having difficulty finding stocks that meet my criteria.”
• “I have a long-term (significant) allocation established. I probably would not actively increase my allocation to stocks.”
• “Settlement with China on tariffs and indications of a global economic recovery.”
• “I would need a drop in the U.S. market exceeding 10%.”
• “Getting younger, which isn’t going to happen.”

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