U.S. households have increased their exposure to stocks to the highest level on record

Data: FactSet; Chart: Dion Rabouin/Axios Visuals

U.S. households increased their exposure to stocks to 41% of their total financial assets in April, the highest level on record, WSJ reported Sunday, citing JPMorgan and Federal Reserve data that dates back to 1952.

Why it matters: It's the latest evidence that investors are getting far more bullish on equities, increasing exposure to risk and reducing hedges.

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  • The data includes 401(k) retirement accounts, which means everyday Americans' savings are following retail and institutional traders' bets that the stock market will continue to fly high.

By the numbers: Stock funds have seen net inflows for seven straight weeks, including a net $53.7 billion for the week ending March 17, an all-time high, according to data from the Investment Company Institute.

The big picture: Everyone and their mother is buying stocks, with flows underpinned by record borrowing from hedge funds and big banks, as well as a record level of margin debt being held by retail and institutional investors.

  • Equity funds haven't seen net outflows since the week of March 3, with the S&P 500 rising by 10% since then.

  • By mid-April, more money had flowed into stock funds this year than had been seen for the 12-year period of 2008-2020.

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