Chart of the Week: Everyone Else’s 401K Stock Funds Allocation

If we had to guess, we’d say that investors are at the stage where they’re calling up their brokers every day (or even hour), and investing more.. more and… well even more into their favorite stock (or company). With markets at all time highs, have you ever wondered how much of other people’s portfolios are truly dedicated to U.S. Equities? Not only that, but how portfolio allocation to stocks compares to the last 13 years? You’d think it would be at all-time highs as well, with all the content being shelved to consumers at the moment. Lucky for us, J. Lyons Fund Management has just the chart of 401k Stock Funds Allocation.

401 Stock Allocation
(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Stock Twits

We found this chart interesting and while its hard to tell if the % increase is due to new allocations or growth of existing funds (or some combination of both) this chart could be telling us that stocks might be getting a little overdone again. It’s also important to note, that this is looking at stock funds allocation (meaning ETF’s or mutual funds of the S&P 500), and not individual stock holdings.

Now to answer our questions. The 401k investor stock funds allocation is currently at 64% (Disclaimer: Past performance is not necessarily indicative of futures results). In February of 2009, that was only at 48%. But if we look at the larger picture we see, even though stocks are at all-time highs, and stock funds allocation is up 16% post 2008 financial meltdown, it’s gradually on the decline. Before the dot com bubble burst in 2000, 401k investor stock funds allocation was hovering around 75%, and it’s now down to 64% (an -11% decrease) over the course of 13 years (2 Bull markets, 2 Bear markets).

Three implications come to mind when we see these numbers; first that investors may still be in some sort of shell shock from the dot com burst and the 2008 financial meltdown to truly trust all their funds in the stock market; secondly, that an increasing volume of investors may be choosing a combination of investments in their portfolio (such as bonds, cash, and alternatives like managed futures) to find non-correlated return drivers in their portfolios instead of trusting most of their funds to the stock market; thirdly, that no matter where the rest of the 46% allocation is being invested, overall, investors are investing above the general rule of 60% stocks/40% bonds. For additional thoughts on portfolio asset allocation,  see our newsletter, “Why Am I Deviersifying Again?”

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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