Stock Allocations Approaching Dotcom Levels

Each month, the American Association of Individual Investors (AAII) surveys its member regarding their current level of stock, bond and cash allocation (this is separate from the weekly stock sentiment survey published by AAII which has become too volatile and erratic to be a consistently useful sentiment tool, in our view). The monthly allocation survey tends to move at a measured pace, dictated by the movement in asset prices. Thus, we have found it to be a fairly useful barometer of longer-term investor sentiment.