Recommended Stock Allocation Continues to Fall

Below we highlight the consensus recommended allocation to stocks from US strategists (as compiled by Bloomberg).  Currently, the consensus says investors should have 58.6% of their portfolios in stocks.  As shown in the chart, recommended stock allocation has been in a downtrend since late 2001, but it did see a pickup in late 2006/early 2007 just before the markets topped out. 

When the credit crisis hit, recommended stock allocation fell sharply.  With the price of the S&P 500 included in the chart, you don't need us to tell you the usefulness (or lack thereof) of these recommendations.

click to enlarge