Nearly a Quarter of Investors Have Higher Cash Allocation Than They Expected

Last month’s Asset Allocation Survey special question asked AAII members how their current asset allocation compares to what they thought it would be at the start of the year.

Nearly one-third of all respondents (31%) say their current allocation strategy is about what they thought it would be at the beginning of the year. This compares to 8% of respondents who say they are following a more conservative allocation strategy due to the current economic environment.

About 22% of respondents say that their current cash allocations are higher than what they expected at the start of the year. A majority within this group also say that they expected to be more heavily weighted in stocks but instead moved to cash. In addition, 10% of respondents say that their current stock allocation is higher than expected, while 10% of respondents say that their current stock allocation is lower than anticipated. Further, 7% of respondents say that they currently hold more bonds than expected and 3% of respondents say that they currently hold more stock funds than expected.

(Some respondents gave more than one answer.)

Here is a sampling of the responses:

• “More conservative using bond funds and increasing cash; plus, I am paying more attention to dividend stocks with financial strength.”
• “I have made no allocation changes since the start of the year. The financial direction of the economy is so uncertain. I have considered adding more international exposure and thought of shedding individual stocks that have suspended or reduced dividends.”
• “I have slightly reduced my risk due to my age and the current state of the economy.”
• “A little heavier on stocks since I bought heavily as the market fell and started to rebound and the recovery has increased the value.”
• “I transferred more cash on hand into my brokerage account to buy more Nasdaq composite stocks when the market crashed in March. Apparently, my mistake was not buying all Nasdaq stocks, but I did manage to capitalize on Google and Apple at least.”