November AAII Asset Allocation Survey: Largest Equity Allocations Since 2017

Equity allocations among individual investors reached their highest level in four years last month. The November Asset Allocation Survey also shows a small decline in fixed-income exposure.

Stock and stock fund allocations increased by 1.2 percentage points to 71.4% in the month. Equity exposure was last higher in December 2017 when allocations were at 72.0%. November also marked both the ninth consecutive month that equity allocations were at or above 70% and the 18th consecutive month that AAII members’ exposure to equities was above the historical average of 61.0%.

Bond and bond fund allocations pulled back by 0.7 percentage points to 14.4%. Fixed-income allocations were last at this level in May. The decline keeps fixed-income exposure below its historical average of 16.0% for the ninth consecutive month.

Cash allocations fell by 0.5 percentage points to 14.2%. They were last lower in August (13.7%). November was the 19th consecutive month that cash allocations have been below their historical average of 23.0%.

Equity allocations remain at an unusually high level (above 69%). Stocks rebounded throughout November, sending the S&P 500 index to new record highs, until the last week when the coronavirus omicron variant was discovered and Federal Reserve chair Jerome Powell announced the possibility of accelerating the tapering of debt purchases.

Optimism among individual investors about the short-term direction of the stock market reached its highest level since April (48%) during the second week of November, before declining during the second half of the month. Bearish sentiment jumped to 35.7% late in the month, rising above its historical average of 30.5% for the first time since mid-October.

• Stocks and Stock Funds: 71.4%, up 1.2 percentage points
• Bonds and Bond Funds: 14.4%, down 0.7 percentage points
• Cash: 14.2%, down 0.5 percentage points

• Stocks: 33.2%, up 1.6 percentage points
• Stocks Funds: 38.2%, down 0.4 percentage points
• Bonds: 2.0%, down 0.4 percentage points
• Bond Funds: 12.4%, down 0.3 percentage points

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