Decline in Interest Rates Not Affecting the Majority of Investors’ Allocations

Last month’s Asset Allocation Survey special question asked AAII members how the recent decline in interest rates has affected their investment decisions. More than three out of five respondents (62%) say the drop hasn’t had an effect because their portfolios are primarily allocated to stocks. About 18% are seeking stocks with growing dividends, traditional dividend payers such as utilities or variable rate bonds. Almost 11% of respondents say they are avoiding bonds, while another 4% say they are more cautious because of the inverted yield curve.

Here is a sampling of the responses:

• “No effect. I keep a relatively steady allocation.
• “No effect to date. I am concerned about the yield curve, however, in terms of slowing growth.”
• “I’m more inclined to give solid dividend payers and growers a spot in my portfolio.”
• “Not at all. No one can accurately forecast interest rates, and there’s no telling where they’ll be three months from now.”
• “Not at all. I do not have a substantial portion of my assets in fixed-income securities.”