AAII Asset Allocation Survey: Here’s Your Update on Demand for Stocks

Equity allocations nearly reached a two-year high last month, according to the February AAII Asset Allocation survey. Conversely, fixed-income allocations declined to a 10-month low.

Stock and stock fund allocations rose 1.1 percentage points to 62.5%. This was the largest allocation to equities since April 2011. The historical average is 60%.

Bond and bond fund allocations declined 1.0 percentage points to 19.2%. This is the smallest allocation to fixed-income since April 2012. It is also the first time in seven months that bond and bond fund allocations are below 20%. Even with the drop, fixed-income allocations are above their historical average of 16% for the 44th consecutive month.

Cash allocations slipped 0.2 percentage points to 18.2%. Cash allocations have been at or near this level during five out of the past seven months. This was the 15th consecutive month that cash allocations are below their historical average of 24%.

AAII members remained optimistic about the short-term direction of stocks throughout much of February. The good start for the year combined with better-than-forecast earnings and signs of continued economic growth boosted equity allocations. Optimism did…