Investing.com – Two charts offer different perspectives on current individual investor asset allocations.
The first is based on American Association of Individual Investors (AAII) data for the period 1987-2017.
The second looks at “implied asset allocations” calculated on the basis of aggregated assets in mutual funds using Investment Company Institute (ICI) data for the period 1984-2017.
The AAII chart shows high equity allocations but below the highs seen during 2015 and during the dot.com boom.
Cash allocations are at the low end of the range, and show a movement out of cash into bonds after the financial crisis ushered in zero interest rate policies.
The ICI chart, shows a similar pattern.
Equity allocations are at the upper end of the range, while bonds have taken over from cash in the form of money market funds, which are at all-time lows.
The chart points to a mass migration out of money market funds and into stock funds in the 1980s and 1990s.
These charts might provide some insight of what might happen next, it being hard to see equity allocations going higher at this point.
Cash might be the bottom of the range, but interestingly investors as a group are still holding 15-20% of their assets in cash.