December AAII Asset Allocation Survey: Cash Exposure Rebounds

Individual investors’ exposure to cash rebounded in December after having fallen to nearly a two-year low in November. The December AAII Asset Allocation Survey also shows small declines in equity and fixed-income exposure.

Stock and stock fund allocations pulled back by 1.2 percentage points to 65.8%. Even with the decline, stock and stock fund allocations are above their historical average of 61.0% for the 81st consecutive month.

Bond and bond fund allocations were 0.1 percentage points lower at 18.6%. Fixed-income allocations are above their historical average of 16.0% for the 10th consecutive month and the 11th time in 12 months.

Cash allocations rose by 1.3 percentage points to 15.7%. Even with the increase, cash allocations are below their historical average of 23.0% for the 97th consecutive month.

The new record highs for the major stock indexes and two weeks of above-average bullish sentiment did not translate into larger equity allocations. Rather, the results from our asset allocation survey suggest that many individual investors chose to keep their allocations largely unchanged.

December AAII Asset Allocation Survey results:

• Stocks and stock funds: 65.8%, down 1.2 percentage points
• Bonds and bond funds: 18.6%, down 0.1 percentage points
• Cash: 15.7%, up 1.3 percentage points

December AAII Asset Allocation Survey details:

• Stocks: 28.7%, up 0.9 percentage points
• Stock funds: 37.1%, down 2.0 percentage points
• Bonds: 3.9%, up 0.1 percentage points
• Bond funds: 14.6%, down 0.3 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, stock funds, bonds, bond funds and cash. The survey and its results are available online at: www.aaii.com/investor-surveys.

Want to weigh in? Take the survey yourself and see results online at www.aaii.com/assetallocationsurvey.