Individual investors kept their portfolio allocations to equities essentially unchanged last month, according to the latest AAII Asset Allocation Survey. Stock and stock mutual fund allocations were 62.2% in December. The historical average is 60%.
Bond allocations fell for a third consecutive month. Individual investors held 20% of their portfolios in bonds and bond funds in December, a 1.8 percentage-point decline from November. This is the smallest allocation to fixed income since February 2010. The historical average is 15%.
Cash allocations rebounded by 1.9 percentage points to 17.8%. Despite the increase, cash allocations are merely at a three-month high. The historical average is 20%.
Though individual investors are bullish about the six-month and full-year outlook for stocks, they did not increase their portfolio allocations to equities. This may partially be due to the fact that some AAII members have already shifted their allocations, particularly from bonds to dividend-yielding stocks.
This month’s special question asked AAII members which asset class will perform best in 2011: large-cap stocks, small-cap stocks, international stocks, Treasuries, corporate bonds or precious metals. Respondents said that large-cap and small-cap stocks should deliver the highest total returns, with both asset classes receiving similar numbers of votes. International stocks were also picked by many investors. Bonds, both corporate and Treasuries, received very few votes.
December Asset Allocation Survey Results:
• Stocks and Stock Funds: 62.2%, down 0.1 percentage points
• Bonds and Bond Funds: 20.0%, down 1.9 percentage points
• Cash: 17.8%, up 1.9 percentage points
Asset Category Details:
• Stocks: 29.1%, down 1.4 percentage points
• Stock Funds: 33.1%, up 1.2 percentage points
• Bonds: 4.7%, down 1.2 percentage points
• Bond Funds: 15.3%, down 0.7 percentage points
• Stocks/Stock Funds: 60%
• Bonds/Bond Funds: 15%
• Cash: 25%
The AAII Asset Allocation Survey has been conducted monthly since November 1987 and asks AAII members what percentage of their portfolios are allocated to stocks, stock funds, bonds, bond funds and cash. The survey and its results are available online at http://www.aaii.com/assetallocationsurvey.
After a week of holiday festivities, its good to be back in the swing of things. I have a few exciting items in the hopper for the coming weeks — some modest changes to the site design, a few new regular features, and some new guest authors in the think tank. Today, we hit post…Read More
The Art of Argument from Bryan Villagonzalo on Vimeo. Dialogue scene from THANK YOU FOR SMOKING.
Here are the latest additions to my Instapaper: • The New Speed of Money, Reshaping Markets (NYT) • Electric Cars Get Charged for Battle (BusinessWeek) • Algorithms Take Control of Wall Street (Wired) • Sweden Shows Central Bankers How to Fight Next Asset Bubble (Bloomberg) • Funny = Money (NYT Magazine) • 439 Ways to…Read More
Category: Financial Press
Interesting set of changes over the last decade: > from IO9
Category: Digital Media
The ISM manufacturing index was right in line with expectations at 57, up a touch from 56.6 in Nov and the best since May. New Orders rose 4.3 pts to 60.9, Production was up 5.7 pts to 60.7 and Backlogs rose 1 pt but is still soft at 47. Manufacturer Inventories fell 5 pts from…Read More
Its the beginning of the new year, and you probably made some resolutions. Odds are that by the time this month is halfway over, all those resolutions will be broken, then forgotten. Well, armed with a little knowledge, you might be able to make some actual positive changes. Consider these 10 mistakes most people make…Read More