The current bull market in stocks is now 12 months old. The S&P 500 has risen 74% since the March 2009 lows. After a mini-correction to start 2010, investors have aggressively bid up shares, driving the S&P 500 up 11% over the last two months to a new 52-week high. Many institutional investors jumped in early and as a group they are now fully invested, as evidenced by the low liquid asset ratio of stock mutual funds (read more here). But individual investors were late to the party. Two damaging bear markets in ten years caused some hesitation. The most likely catalyst for a continuation of the current bull market is a sustained move back into equity mutual funds by individual investors. Will it happen? That’s the $64,000 question. My chart shows the percentage of individual investor portfolios allocated to equities. I’m using the American Association of Individual Investors’ weekly asset allocation survey as a proxy for individual investor stock ownership. The trend is clearly away from equities. A breakout in this indicator would likely lead to higher stock prices, but if individuals don’t move back into stocks, the bull market’s days may be numbered.