Morningstar's latest numbers agree with anecdotal word from advisors: retail investors are finally dipping back into the stock market, or are at least less skittish about the prospect.
What Morningstar analysts have discovered is that retail investors are no longer actively selling stock funds to quite the terrified extent that we saw over the last few years. And the corresponding risk-averse attraction to bonds is weakening fairly dramatically as $7.6 billion pour out of municipal bond funds.
If your clients are anything like the people Morningstar looked at, they are probably getting excited about taking on a bit more risk in order to hunt the prospect of correspondingly rich returns. Now is the time to see if risk tolerances have changed.
Whether the answer ends up making you (or anyone else) adjust anyone's portfolio depends on the conversations that follow. But with so much money still on the sidelines in what amounts to zero-rate money markets -- and with long-term retirement plans still hurting from the 2008-9 market downswing -- the role of equities in a long-term portfolio may be worth revisiting with your clients as part of the normal year-end meeting cycle.