November AAII Asset Allocation Survey: Cash Allocations Remain High

Cash as a percentage of individual investors’ portfolios pulled back from a 2.5-year high last month. The November AAII Asset Allocation Survey also shows equity allocations growing marginally while fixed-income allocations were flat.

Stock and stock fund allocations increased by 0.8 percentage points to 62.4%. Despite the increase, this marked the second-lowest reading since May 2020 (60.8%). Equity exposure remains above the historical average of 61.5% for the 30th consecutive month.

Bond and bond fund allocations remained relatively flat, declining by only 0.1 percentage points to 13.6%. Bond and bond fund allocations are below their historical average of 16.0% for the 21st consecutive month.

Cash allocations fell by 0.7 percentage points to 24.0%. Even with the decline, this reading is higher than 31 of the last 32 months. This is also the second time in 31 months that cash allocations are above their historical average of 22.5%.

Optimism about the short-term direction of the stock market continued to be unusually low throughout November. Concerns are looming about the overall direction of the economy, inflation and potential interest rate hikes. It should be noted that most of this month’s results were tabulated before yesterday’s comments about monetary policy were made by Federal Reserve chairman Jerome Powell.

November AAII Asset Allocation Survey results:

• Stocks and Stock Funds: 62.4%, up 0.8 percentage points
• Bonds and Bond Funds: 13.6%, down 0.1 percentage points
• Cash: 24.0%, down 0.7 percentage points

November AAII Asset Allocation Survey details:

• Stocks: 30.4%, up 0.3 percentage points
• Stock Funds: 32.0%, up 0.4 percentage points
• Bonds: 3.8%, up 0.2 percentage points
• Bond Funds: 9.8%, down 0.2 percentage points

Historical averages:

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

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.