November 2025 AAII Asset Allocation Survey: Stock Allocations Rise, Bond Allocations Fall

This analysis is based on the November 2025 AAII Asset Allocation Survey, released on December 1, 2025, at 11:03 AM EST [1]. The survey reveals U.S. individual investors increased stock and stock fund allocations by 0.7 percentage points to 71.2%, while reducing bond and bond fund allocations by 0.8 percentage points to 14.0%; cash allocations rose slightly by 0.1 percentage points to 14.8% [1].

On the survey release day, major U.S. equity indices had mixed results: S&P 500 (+0.03%), NASDAQ Composite (+0.45%), and Dow Jones Industrial Average (-0.45%) [0]. The 10-year U.S. Treasury yield rose 7 basis points to 4.08%, driven by a Japanese debt sell-off and corporate bond issuance rather than direct survey reaction [2].

Historical context shows stock allocations (71.2%) are well above the 61.5% historical average and have remained above average for 65 consecutive months (as of October 2025) [4]. Bond allocations (14.0%) are below the 16.0% historical average, and cash allocations (14.8%) are significantly below the 22.5% historical average, with cash levels below average for 35 consecutive months [4]. The SPDR S&P 500 ETF (SPY) has a market cap of $696.73B and has shown strong year-to-date (+16.36%) and 1-year (+12.70%) performance [0].

Notably, a sentiment disconnect exists: despite high stock allocations, AAII sentiment data shows November bearish sentiment (42.7%-52.9%) well above the 31.0% historical average, while bullish sentiment (32.0%-37.97%) remained below the 37.5% historical average [3].

1. Prolonged equity overweight
   : Stock allocations have stayed above historical averages for over five years, indicating sustained individual investor confidence in equities despite elevated bearish sentiment [4].
2. Diminishing portfolio diversification
   : Low bond (below 16.0% average) and cash (below 22.5% average) allocations reduce traditional portfolio hedges, potentially exposing investors to greater volatility [4].
3. Sentiment-action disconnect
   : The gap between high stock allocations and pessimistic sentiment suggests underlying uncertainty, which could trigger market swings if sentiment shifts broadly [3].
4. SPY as a core equity proxy
   : The strong performance of SPY aligns with elevated individual investor stock allocations, highlighting its role as a key equity exposure for many investors [0].

• Risks
  :
  • Market correction risk: High stock allocations above historical averages may signal complacency, increasing the potential for a market pullback [4].
  • Diversification vulnerability: Low bond and cash allocations limit portfolio protection against rising interest rates and equity downturns [4].
  • Volatility from sentiment shifts: The disconnect between actions and sentiment could lead to increased volatility if investors adjust positions abruptly [3].
  • Interest rate sensitivity: Rising 10-year Treasury yields underscore the need to monitor Fed policy and inflation, which could impact both stock and bond valuations [2].

• Opportunities
  :
  The survey data and market reactions do not indicate explicit short-term opportunities, suggesting a neutral landscape that requires careful monitoring for potential shifts.

The November 2025 AAII survey shows individual investors continue to favor equities, with stock allocations well above historical averages and bond allocations below averages. Market reactions were mixed, with Treasury yields rising due to external factors. A notable disconnect between high stock allocations and elevated bearish sentiment indicates underlying investor uncertainty. Risks include potential market correction, limited diversification, and sentiment-driven volatility. Decision-makers should note the survey’s focus on individual investors (excluding institutions) and the need for additional economic context (inflation, GDP, Fed policy) when interpreting results.