“Individual investors held 52.9% of their portfolios in stocks and stock funds last month, according to the June 2010 AAII Asset Allocation Survey. This is a 1.9 percentage point increase from May, but still well below the historical average of 60%.
Bonds and bond funds comprised 21.6% of individual investor portfolios, a 3.8 percentage point decline from May. Despite the decrease, this is the fifth time in six months that allocations to fixed-income have been above 20%. The historical average is 15%.
Cash allocations increased for the third consecutive month. Individual investors held 25.5% of their portfolios in cash last month, a 1.9 percentage point increase from May. The historical average is 25%.
Individual investors continue to struggle with a volatile stock market, low bond yields and concern that both inflation and interest rates will be higher in the future. Some are looking at dividend-yielding stocks, while others are simply moving more money to cash.”
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.
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