February AAII Asset Allocation Survey: Equity Exposure Rises for Fourth Consecutive Month

Individual investors’ exposure to equities increased for the fourth consecutive month in February according to the latest AAII Asset Allocation Survey. Fixed-income allocations also rose, while cash allocations continued to pull back.

Stock and stock fund allocations rose 0.4 percentage points to 65.7%. This is the highest reading since May 2022 (67.1%). Equity exposure remains above the historical average of 61.5% for the 33rd consecutive month.

Bond and bond fund allocations increased by 0.3 percentage points to 14.9%. Bond and bond fund allocations are below their historical average of 16.0% for the 24th consecutive month.

Cash allocations declined by 0.7 percentage points to 19.4%. This is the smallest exposure to cash since May 2022 (19.1%). Cash allocations are below their historical average of 22.5% for the third consecutive month.

The increases in equity and fixed-income allocations were not large, but both extended recent trends of rising allocations. This occurred despite a decline in stock prices and a rise in bond prices last month. Optimism about the short-term direction of the stock market reached its highest level since 2021 in the weekly AAII Sentiment Survey in early February before declining during the second half of the month.

• Stocks and Stock Funds: 65.7%, up 0.4 percentage points
• Bonds and Bond Funds: 14.9%, up 0.3 percentage points
• Cash: 19.4%, down 0.7 percentage points

• Stocks: 31.4%, down 0.6 percentage points
• Stocks Funds: 34.3%, up 0.9 percentage points
• Bonds: 4.2%, down 0.1 percentage points
• Bond Funds: 10.7%, up 0.5 percentage points

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