Today’s chart comes to us from Torsten Slok, the chief international economist at Deutsche Bank AG.

While rumors of an institutional rotation -- selling equities and buying fixed income -- swirl, we see the opposite behavior from households.

Source: Deutsche Bank Research
Source: Deutsche Bank Research

As the chart above shows, the bull market, starting in March 2009 was in large part ignored by individual investors. Equities increased as a percentage of their portfolios primarily because they offered strong gains.

Recently, we have seen more Mom and Pop investors choosing equities and reducing their contributions to fixed income. This hasn't been a problem in the past until their holdings of equities reach a level about 15 percent above the historic average, according to data from the American Association of Individual Investors.

Slok suggests that the rotation by pension funds and insurance companies might “continue to hold rates down for many years.” If that's case -- and there are good reasons to doubt that such a trend, if it even exists, will persist -- it only strengthens the argument in favor of stocks over bonds.

To contact the author of this article: Barry Ritholtz at

To contact the editor responsible for this article: Alex Bruns at