October AAII Asset Allocation Survey: Cash Allocations Reach Five-Month High

Cash allocations among individual investors reached a five-month high in October. The latest AAII Allocation Survey also shows a decline in fixed-income exposure.

Stock and stock fund allocations stayed at 70.2% for the second consecutive month. October marked the eighth consecutive month that equity allocations were at or above 70%. Last month was also the 17th consecutive month AAII members’ exposure to equities was above the historical average of 61.0%.

Bond and bond fund allocations pulled back by 0.4 percentage points to 15.1%. The reversal of September’s increase keeps fixed-income exposure below its historical average of 16.0% for the eighth consecutive month.

Cash allocations increased by 0.4 percentage points to 14.7%. Cash allocations were last higher in May 2021 (15.1%). October was the 18th consecutive month that cash allocations have been below their historical average of 23.0%.

Equity allocations stayed at an unusually high level (above 69%). Stocks rebounded throughout October, sending the S&P 500 index to new record highs. Optimism among individual investors about the short-term direction of the stock market rose during the first three weeks of October, according to our weekly Sentiment Survey. Bullish sentiment pulled back during the final week of the month but ended October at an above-average level of 39.8%.

• Stocks and Stock Funds: 70.2%, up 0.0 percentage points
• Bonds and Bond Funds: 15.1%, down 0.4 percentage points
• Cash: 14.7%, up 0.4 percentage points

• Stocks: 31.6%, down 0.0 percentage points
• Stocks Funds: 38.6%, up 0.1 percentage points
• Bonds: 2.3%, down 0.1 percentage points
• Bond Funds: 12.7%, down 0.3 percentage points

• Stocks/Stock Funds: 61.0%
• Bonds/Bond Funds: 16.0%
• Cash: 23.0%