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Stock and stock fund allocations declined but remain above their historical average for the 27th month in a row. Bond, bond fund and cash allocations only showed minor changes this month. Of alternative investments held by members, real estate is represented the most. The June AAII Asset Allocation Survey reveals that individual investors increased their cash allocations for the third consecutive month. The rise in cash levels occurred as equity allocations fell to their lowest level since January. Stock and stock fund allocations declined 0.5 percentage points to 67.2%. June tied January for having the smallest allocation to equities in 2015. Nonetheless, stock and stock fund allocations remained above their historical average of 60% for the 27th consecutive month. Bond and bond fund allocations were unchanged at 15.5%. Technically bond fund allocations declined and bond allocations rose, but the changes were very minor. June was the second consecutive month with fixed-income allocations below their historical average of 16.0%. Cash allocations edged up 0.5%, to 17.3%. This third consecutive monthly increase kept cash allocations at their highest level since October 2014 (18.7%). The increase was not large enough to keep cash allocations from being below their historical average of 24% for the 43rd consecutive month, however. The rising level of cash corresponds with trends we’ve been seeing in our weekly Sentiment Survey. Neutral sentiment has been at an unusually high level for 12 consecutive weeks. Neutral sentiment’s record streak of consecutive weekly readings at or above 45% for 10 consecutive weeks lasted through much of last month. At the same time, many individual investors continue to be frustrated by the ongoing low-interest-rate environment. June’s special question asked AAII members if any portion of their portfolio is allocated to alternative investments (something we do not track in our monthly survey). Almost half of all respondents (49%) said no, they do not hold any alternative investments. Some said they have no interest in owning them, while others suggested they needed to learn more about these types of investments before deciding to allocate to them. A small group of members asked us to define what counts as an alternative investment. Slightly more than a third (35%) said they own alternative investments. Many described their allocations to “alts” as accounting for 10% or less of their total portfolio. Real estate was most common, with 15% of all respondents saying they had exposure to it either through real estate investment trusts (REITs) or via a direct ownership. One member has ownership in a vineyard. Here is a sampling of the responses: “I do not and will not consider ‘alternative investments.'” “No, because I do not have enough information about ‘alternative investments’ for evaluation.” “Not much…I tried silver, gold, stamps, and convertible bonds; no returns are as good as stocks.” “Yes, about 8% to 10% of my portfolio is in ‘alternative investments.'” Note: A spreadsheet error led to incorrect data being sent out in last month’s press release. The correct numbers for May’s Asset Allocation Survey were as follows: stocks and stock funds: 67.7% (down 0.2 percentage points), bonds and bond funds: 15.5% (down 0.7 percentage points) and cash: 16.9% (up 1.0%). June AAII Asset Allocation Survey results: Stocks and Stock Funds: 67.2%, down 0. 5 percentage points Bonds and Bond Funds: 15.5%, unchanged Cash: 17.3%, up 0.5 percentage points June AAII Asset Allocation Survey details: Stock Funds: 33.5%, down 1.1 percentage points Stocks: 33.6%, up 0.6 percentage points Bond Funds: 11.8%, down 0.1 percentage points Bonds: 3.8%, up 0.1 percentage points Historical Averages: Stocks/Stock Funds: 60% Bonds/Bond Funds: 16% Cash: 24% *The numbers are rounded and may not add up to 100%. 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 here . Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Scalper1 News
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