, Columnist
How Equities Took Over Asset Allocations
Previous high levels have preceded brutal bear markets.
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A combination of a rising stock market and low interest rates has increased investor allocations to equities sharply in recent years. The average investor allocation to equities is now more than 40 percent, which is higher than it was at the latest peak, in 2007.
There have only been two times since World War II that allocations to stocks have been higher -- after the go-go years of the 1960s and at the height of the dot-com bubble in the late 1990s. From the peak in early 2000 to the trough in early 2009, allocations to stocks were cut in half. Much of this had to do with two market crashes in which stocks were chopped in half.