Small investors aren’t just feeling bullish – they’re acting bullish. According to the AAII‘s November allocation poll small investor equity allocation reached an 11 month high. Charles Rotblut at AAII elaborated on the details:
“Individual investors’ allocations toward stocks and stock funds reached an 11-month high of 62.3% last month, according to the November AAII Asset Allocation Survey. The 2.1 percentage point rise represented the fourth consecutive increase in the amount of portfolio dollars allocated to equities. The historical average is 60%.
Bond and bond fund allocations were essentially unchanged at 21.8%. This was the 10th time in 11 months that fixed income allocations have exceeded 20%. The historical average is 15%.
Cash allocations fell 1.8 percentage points to 15.9%. This is the lowest amount of portfolio dollars held in cash since March 2000, when stock allocations reached 77%. The historical average is 25%.”
Naturally, small investors are chasing the rally. They were very bearish at the bottom and now remain only mildly bullish after the rally. At 62.3% the equity allocation is just above its historical average of 60%. At 21.8% bond allocations are substantially above the average of 15%.
Source: AAII
——————————————————————————————————————————————————
The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
the more this number rallies, the closer we’ll be to the top, right? i think so…
OMG! If small guys are bidding up stocks, then someone’s taking their money. I smell a trap, and a possible tragedy for small investors.
Not a trap, but someone is naturally reducing their exposure to stocks as the small investor piles in. As a contrarian indicator this has worked fairly well to market major turning points. Right now I’d say there is substantial upside in the long-term before small investors are excessively exuberant.
TPC,
>substantial upside in the long-term before small investors are excessively exuberant.
Did you mean to say “in the short-term”?
I think there are few more that can be separated from their money before the fleecing begins. The temptation for the harvesters must be intense…. like the wolf in Little Red Riding Hood.
One could look at this at call it a success from Bernanke’s QE2 perspective – herding investors into risk assets, forcing the market ever higher and sprinkle in a dash of reflexivity and what do you know, you have an economic recovery on your hands. That’s where we appear to be at right now.
When we break 1225 tomorrow or the day after the next stop is 1325-1350 before there will be any type of pull-back.
The market is more bullish now from a trading standpoint than it was during the run-up into the April highs. Nearly every industry ex financials are about to break out to new all-time highs – consumer stocks, auto, industrial…the list goes on and on and on.
Well state B Ferro my year end target is 1325. Short interest is still high across the markets, they are getting carried out in stretchers. The heavily shorted names should continue to outperform.
Let me know when Tyler at Zero Hedge turns bulliSh. Then I’ll turn bearish again.
You don’t like Tyler Dan?
This could go on for another 2k dow points. Good luck using this indicator at its current reading to go short.
“It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges.” – John Maynard Keynes
© 2009 pragcap.com · Register for PC
Small investors aren’t just feeling bullish – they’re acting bullish. According to the AAII‘s November allocation poll small investor equity allocation reached an 11 month high. Charles Rotblut at AAII elaborated on the details:
“Individual investors’ allocations toward stocks and stock funds reached an 11-month high of 62.3% last month, according to the November AAII Asset Allocation Survey. The 2.1 percentage point rise represented the fourth consecutive increase in the amount of portfolio dollars allocated to equities. The historical average is 60%.
Bond and bond fund allocations were essentially unchanged at 21.8%. This was the 10th time in 11 months that fixed income allocations have exceeded 20%. The historical average is 15%.
Cash allocations fell 1.8 percentage points to 15.9%. This is the lowest amount of portfolio dollars held in cash since March 2000, when stock allocations reached 77%. The historical average is 25%.”
Naturally, small investors are chasing the rally. They were very bearish at the bottom and now remain only mildly bullish after the rally. At 62.3% the equity allocation is just above its historical average of 60%. At 21.8% bond allocations are substantially above the average of 15%.
Source: AAII
——————————————————————————————————————————————————
The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
the more this number rallies, the closer we’ll be to the top, right? i think so…
OMG! If small guys are bidding up stocks, then someone’s taking their money. I smell a trap, and a possible tragedy for small investors.
Not a trap, but someone is naturally reducing their exposure to stocks as the small investor piles in. As a contrarian indicator this has worked fairly well to market major turning points. Right now I’d say there is substantial upside in the long-term before small investors are excessively exuberant.
TPC,
>substantial upside in the long-term before small investors are excessively exuberant.
Did you mean to say “in the short-term”?
I think there are few more that can be separated from their money before the fleecing begins. The temptation for the harvesters must be intense…. like the wolf in Little Red Riding Hood.
One could look at this at call it a success from Bernanke’s QE2 perspective – herding investors into risk assets, forcing the market ever higher and sprinkle in a dash of reflexivity and what do you know, you have an economic recovery on your hands. That’s where we appear to be at right now.
When we break 1225 tomorrow or the day after the next stop is 1325-1350 before there will be any type of pull-back.
The market is more bullish now from a trading standpoint than it was during the run-up into the April highs. Nearly every industry ex financials are about to break out to new all-time highs – consumer stocks, auto, industrial…the list goes on and on and on.
Well state B Ferro my year end target is 1325. Short interest is still high across the markets, they are getting carried out in stretchers. The heavily shorted names should continue to outperform.
Let me know when Tyler at Zero Hedge turns bulliSh. Then I’ll turn bearish again.
You don’t like Tyler Dan?
This could go on for another 2k dow points. Good luck using this indicator at its current reading to go short.
Read Full Article »