The latest monthly survey from the AAII shows that small investors increased their equity allocation despite the tumbling market. This is in stark contrast to the recent State Street Survey of institutional money which shows that the “smart money” is moving out of stocks. According to the historical data the current equity reading of 55% is 5% below the average while bonds remain 5% overweight and cash is right in-line with the historical average.
Historical Averages (November 1987 through August 2010)
- Stocks Total: 60%
- Highest Value: 77.0% (January 2000 & March 2000)
- Lowest Value: 40.8% (March 2009)
- Bonds Total: 15%
- Highest Value: 25.5% (May 2010)
- Lowest Value: 6.9% (November 2000)
- Cash: 25%
- Highest Value: 44.8% (March 2009)
- Lowest Value: 11.0% (March 1998)
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.