You can feel it in the air when a bull market hits a fever pitch...

Friends and family will be talking about the market for the first time. And everyone from cab drivers to your local barber will want to share stock tips.

We all know what market euphoria feels like. The last time we saw it was in 2021... All kinds of assets were rising in sync, and everyone thought the excitement would never end.

Today's bull market is a far cry from those euphoric levels. Most folks are skeptical of the current boom. That doesn't mean they aren't buying, though...

In fact, mom-and-pop investors have upped their stock allocation to the highest level in years. But as I'll explain, that isn't a sign of an imminent market top.

Investors buy more stocks when prices are going up – and they buy fewer stocks when they're going down. This is what drives market trends.

We're approaching the two-year anniversary of the current bull market. And thanks to the virtuous cycle in play, stock ownership is now hitting multiyear highs.

That's according to data from the American Association of Individual Investors ("AAII"). This nonprofit's goal is to educate individual investors. And it collects valuable data from its survey respondents.

We usually look at the AAII Sentiment Survey to get a sense of how investors are feeling... But the organization also sends out a monthly asset allocation survey. In it, the AAII asks folks what percentages of their portfolios are in stocks, bonds, and cash.

Naturally, we'd expect stock holdings to be on the rise in a bull market. And that's exactly what we've seen in recent years. Take a look...

Mom-and-pop investors are buying stocks. Their stock allocations just notched above 70%. It's the highest level we've seen since the end of 2021... and close to the highest level of the past decade.

You might think this is worrisome. Sentiment is turning bullish, and everyday folks own more stocks today than they have in years.

But if we zoom out a little more, we can see that these readings aren't near the historical peak...

With the full history at our disposal, we can see that today's stock allocations are still high – but they aren't a grave concern. We've seen higher percentages more than once in the past decade.

The 1990s readings near 80% were also significantly higher than where we are today. We first saw a reading above 70% in 1996... And the market took years to peak from there. Stocks even soared for more than two years after the first 75% reading in 1998.

In short, mom-and-pop investors are buying. They own more stocks in their portfolios than they have in years. But this bullish attitude has a long way to go before it's a cause for concern.

With stocks on the rise, market sentiment is improving. But improved sentiment won't kill this boom.

We have plenty of runway before euphoria takes hold... And that means we're staying long today.

Good investing,

Brett Eversole