February AAII Asset Allocation Survey: Equity Allocations Above 60% for 11th Month

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Individual investors’ allocation to equities stayed above 60 percent for the 11th consecutive month in February, according to the latest AAII Asset Allocation survey. This is the longest such streak since prior to the financial crisis. Fixed-income allocations declined last month, while cash holdings increased slightly.

Stock and stock fund allocations rebounded by 1.3 percentage points to 66.9 percent. February was not only the 11th consecutive month with equity allocations above their historical average of 60 percent, but also the 13th out of the past 14 months.

Bond and bond fund allocations declined 0.8 percentage points to 16.2 percent. Even with the decline, fixed-income allocations were above their historical average of 16 percent for the 55th time in the past 57 months.

Cash allocations decreased 0.5 percentage points to 16.9 percent. This made February the 27th consecutive month with cash allocations below their historical average of 24 percent. The current streak of above-average equity allocations is the longest since a 12-month streak between August 2003 and July 2004.

February’s rebound in stock prices alleviated some of the short-term fears that a market top had been established in January. Even though the month ended with the S&P 500 at a record high, bullish sentiment remained below the levels recorded at the start of the year. Improving stock prices helped to boost the value of equity allocations while a relatively stable yield environment did not alter the value of fixed-income holdings much.

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