December AAII Asset Allocation Survey: Cash Allocations Fall

Cash as a percentage of individual investors’ portfolios continued to pull back from a 2.5-year high. The December AAII Asset Allocation Survey also shows equity allocations rising and fixed-income allocations rebounding.

Stock and stock fund allocations increased by 1.5 percentage points to 63.9%. Despite two consecutive monthly increases, it was still the fourth-lowest reading since December 2020 (67.6%). Equity exposure remains above the historical average of 61.5% for the 31st consecutive month.

Bond and bond fund allocations grew slightly, increasing by 0.7 percentage points to 14.3%. Bond and bond fund allocations are below their historical average of 16.0% for the 22nd consecutive month.

Cash allocations fell by 2.2 percentage points to 21.8%. Even with the decline, this reading is the fourth highest in the last 32 months. However, cash allocations have fallen below their historical average of 22.5%.

Optimism about the short-term direction of the stock market continued to be unusually low throughout December. Concerns remain about the overall direction of the economy, inflation and potential interest rate hikes.

• Stocks and Stock Funds: 63.9%, up 1.6 percentage points
• Bonds and Bond Funds: 14.3%, up 0.6 percentage points
• Cash: 21.8%, down 2.2 percentage points

• Stocks: 31.8%, up 1.4 percentage points
• Stocks Funds: 32.2%, up 0.2 percentage points
• Bonds: 4.3%, up 0.5 percentage points
• Bond Funds: 10.0%, up 0.1 percentage points

• Stocks/Stock Funds: 61.5%
• Bonds/Bond Funds: 16.0%
• Cash: 22.5%