January AAII Asset Allocation Survey: Equity Exposures Reach 8-Month High

Individual investors’ exposure to equities reached an eight-month high in January. The January AAII Asset Allocation Survey also shows rising fixed-income allocations and declining cash allocations.

Stock and stock fund allocations increased by 1.4 percentage points to 65.3%. This is the highest reading since May 2022 (67.1%). Equity exposure remains above the historical average of 61.5% for the 32nd consecutive month.

Bond and bond fund allocations grew slightly, increasing by 0.3 percentage points to 14.6%. Bond and bond fund allocations are below their historical average of 16.0% for the 23rd consecutive month.

Cash allocations fell by 1.7 percentage points to 20.1%. Even with the decline, this is the eighth consecutive month that cash allocations are above 20.0%. However, cash allocations are below their historical average of 22.5% for the second consecutive month.

Stock prices rose in January while bond yields fell. Nonetheless, optimism about the short-term direction of the stock market remained well below its historical average in January. Concerns remain about the overall direction of the economy, inflation and potential interest rate hikes.

• Stocks and Stock Funds: 65.3%, up 1.4 percentage points
• Bonds and Bond Funds: 14.6%, up 0.3 percentage points
• Cash: 20.1%, down 1.7 percentage points

• Stocks: 31.9%, up 0.2 percentage points
• Stocks Funds: 33.4%, up 1.2 percentage points
• Bonds: 4.3%, up 0.0 percentage points
• Bond Funds: 10.3%, up 0.3 percentage points

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