Charts Of The Day: Trends In Asset Allocation
Callum Thomas | Apr 19, 2017 12:11AM ET
This article looks at two lenses on individual investor asset allocations. Doing this allows us to have a gauge for where the average investor is, compare and contrast our own allocations, and get an insight into any signals that may be present.
Both charts below appeared in a discussion about asset allocation in the latest edition of the ICI data . This will obviously miss out some investments, particularly passive investments and direct ownership, but it shows more or less a similar view.
Equity allocations are at the upper end of the range, bond allocations have taken over vs cash, and cash is at all time lows – albeit this measure of cash is just money market funds. What’s also interesting is (longer time series) how an apparent mass migration occurred out of money market funds and into stock funds during the 80’s and 90’s.
To sum up, these two lenses on individual investor asset allocations should hopefully provide some food for thought on your own allocations, but also add some insight as to what might come next. Indeed, at this point it’s hard to see equity allocations going higher. Likewise, cash is at the bottom end of the range – but then again, at around 15-20% it’s not zero either!
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.