How do investors allocate their money? Real data from M1 portfolios
As of May 31, 2026, M1’s aggregate platform data reveals the following behavioral patterns across the investor base:
- Cash Allocation Rate: 4.1% of portfolio value held in cash
- Margin Utilization Rate: 41.9% of available margin capacity in use (among margin-eligible accounts)
- Automated Investing Ratio: 82.8% of investors have auto-invest enabled
- Median Holdings Count: 13 distinct positions per investor
- Top 3 Concentration: 54.8% of portfolio value in top three holdings (among investors with 4+ positions)
These figures come from real, anonymized portfolio data across M1’s platform — reflecting how investors actually deploy capital across multiple behavioral dimensions, including cash allocation, margin usage, automation adoption, holdings breadth, and portfolio concentration. Each metric is defined and presented with M1’s aggregate data so investors can benchmark their own approach.
This content is for educational and informational purposes only and does not constitute personalized financial advice. All data reflects aggregate, anonymized M1 portfolio trends and does not represent any individual account. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
What is the Cash Allocation Rate?
The Cash Allocation Rate is the share of a total portfolio held in cash.
Cash Allocation Rate = Total Cash Holdings / Total Portfolio Value x 100
Cash plays a role in most financial plans — emergency reserves, near-term spending, and rebalancing buffers all call for liquidity. But cash drag can occur when an investor’s Cash Allocation Rate exceeds what they actually need for those purposes, meaning capital that could participate in markets is sitting idle instead. Whether a given cash level is “too high” depends entirely on the investor’s goals, timeline, and risk tolerance.
What M1 data shows
M1‘s aggregate Cash Allocation Rate as of May 31, 2026: 4.1%
M1 investors hold an average of 4.1% of their portfolios in cash. This figure may reflect M1’s auto-invest feature, which automatically deploys deposited funds according to each investor’s target allocation, reducing unintentional cash accumulation. Whether this level is appropriate depends entirely on the individual — cash needs vary significantly based on financial goals, risk tolerance, and life circumstances. M1’s May 31, 2026 figure of 4.1% serves as a baseline for future quarters, providing a reference point to track how platform-wide cash behavior evolves over time.
| Source | Cash Allocation Rate | Notes |
| M1 portfolios (May 31, 2026) | 4.1% | Aggregate, anonymized platform data. As of 2026-05-31. |
| M1 portfolios (April 30, 2026) | 4.3% | Aggregate, anonymized platform data. As of 2026-04-30. |
| M1 portfolios (Q1 2026) | 5.2% | Aggregate, anonymized platform data. As of 2026-03-31. |
This is not a recommendation for any specific cash allocation level. Individual cash needs vary based on financial goals, risk tolerance, and life circumstances.
Why it matters
A high Cash Allocation Rate is not inherently bad — it depends on whether the cash is intentional. An investor holding 10% in cash as a deliberate tactical reserve is making an allocation decision. An investor holding 10% because deposits went uninvested and dividends accumulated is experiencing drag — capital that could be compounding but is not.
At the same time, holding less cash carries its own risks. Investors with low cash reserves may face forced selling during market downturns or be unable to cover unexpected expenses without liquidating positions at unfavorable prices.
Understanding the Cash Allocation Rate helps investors distinguish between intentional liquidity and unintentional inaction — and weigh the tradeoffs of each.
What is the Margin Utilization Rate?
The Margin Utilization Rate is the percentage of available margin that an investor is actively using. It measures how much borrowed capital — relative to how much is available — an investor has deployed.
Margin Utilization Rate = Margin Balance Used / Total Margin Available x 100
Margin allows investors to borrow against existing holdings to invest or access liquidity without selling positions. When used deliberately within a disciplined framework, it can serve as a tool for maintaining investment positions while funding short-term needs. However, margin amplifies both gains and losses, requires interest payments that reduce net returns, and margin calls can force liquidation of positions at unfavorable times.
What M1 data shows
M1’s aggregate Margin Utilization Rate as of May 31, 2026: 41.9% (among margin-eligible accounts)
Among M1 investors with margin access, 41.9% of available margin capacity is in use. This metric reflects only margin-eligible accounts, not the broader M1 investor base. A higher utilization rate is not inherently problematic — it may reflect deliberate use of margin as a liquidity tool — but investors should be aware that higher utilization leaves less buffer against market fluctuations that could trigger a margin call. Individual borrowing decisions vary significantly based on financial situation and risk tolerance. M1’s April 30, 2026 figure of 42.9% establishes a baseline for future quarters, providing a reference point to track how borrowing behavior across margin-eligible accounts evolves over time.
| Source | Margin Utilization Rate | Notes |
| M1 portfolios (May 31, 2026) | 41.9% | Aggregate, anonymized data across margin-eligible accounts. As of 2026-05-31. |
| M1 portfolios (April 30, 2026) | 42.9% | Aggregate, anonymized data across margin-eligible accounts. As of 2026-04-30. |
| M1 portfolios (Q1 2026) | 49.5% | Aggregate, anonymized data across margin-eligible accounts. As of 2026-03-31. |
Margin investing involves additional risks including interest charges and the possibility of a margin call, which may require selling securities at a loss. This is not a recommendation for any specific margin utilization level.
Why it matters
Margin utilization is one of the least-discussed aspects of retail investor behavior — largely because most platforms do not publish this data. Understanding aggregate margin usage can help investors contextualize their own borrowing decisions, though what’s appropriate varies widely by financial situation.
Transparency around margin behavior also serves an educational function. Many investors have access to margin but may not fully understand the risks — including interest charges that accrue regardless of investment performance, margin calls that can force selling at the worst possible time, and the amplified loss potential that comes with leverage.
Margin borrowing is not appropriate for all investors. Borrowing on margin carries risk, including the possibility of losing more than the original investment. Interest is charged on margin balances and reduces net investment returns. Investors should carefully consider their financial situation, risk tolerance, and investment objectives before using margin. M1 Borrow rates and terms are detailed at M1 Borrow.
What is the Automated Investing Ratio?
The Automated Investing Ratio is the percentage of M1 investors who have enabled the platform’s auto-invest feature — which automatically allocates deposited funds according to a target allocation — rather than relying solely on manual, one-time trades.
Automated Investing Ratio = Investors With Auto-Invest Enabled / Total Active Investors x 100
Auto-invest can help reduce the behavioral friction that may contribute to cash drag and market-timing impulses. When enabled, any funds deposited into an investment account are automatically allocated according to the investor’s target allocation — removing the manual step between depositing and investing. This can help narrow the execution gap between intention and action.
However, automation has limitations. It does not replace the need for periodic portfolio review. Systematic contributions during sustained market declines continue deploying capital into declining positions. And automation can create a false sense of security — investors may neglect to reassess whether their allocation still fits their goals. Automation is a tool for consistency, not a guarantee of good outcomes.
What M1 data shows
M1’s Automated Investing Ratio as of May 31, 2026: 82.8%
82.8% of active M1 investors have auto-invest enabled on at least one account. Most self-directed brokerages do not publish automation adoption data. M1’s May 31, 2026 figure of 82.8% establishes a baseline for future quarters, providing a reference point to track how automation adoption across the platform evolves over time. Individual usage patterns vary.
| Source | Automated Investing Ratio | Notes |
| M1 portfolios (May 31, 2026) | 82.8% | Investors with auto-invest enabled on at least one account. Aggregate, anonymized platform data. As of 2026-05-31. |
| M1 portfolios (April 30, 2026) | 82.8% | Investors with auto-invest enabled on at least one account. Aggregate, anonymized platform data. As of 2026-04-30. |
| M1 portfolios (Q1 2026) | 82.7% | Investors with auto-invest enabled on at least one account. Aggregate, anonymized platform data. As of 2026-03-31. |
This is not a recommendation to use automated investing. Individual investing approaches vary based on financial goals, risk tolerance, and life circumstances.
Why it matters
Automation can help investors maintain consistent contribution behavior, reducing the risk of pausing investments during market downturns or making timing-based decisions driven by short-term volatility. Consistency of approach does not guarantee better outcomes — but it can reduce the influence of behavioral biases on investment decisions.
That said, consistency is not the only factor in outcomes. An investor who consistently contributes to a poorly diversified portfolio may underperform. Automation supports discipline, but it does not substitute for sound allocation decisions.
Automated investing does not guarantee a profit or protect against loss. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
What is the Median Holdings Count?
The Median Holdings Count is the middle value of the number of distinct positions held across investor accounts. It captures the typical number of holdings an investor maintains in their portfolio.
Median Holdings Count = Middle value of the distribution of distinct holdings per account across the cohort
Holdings count is one dimension of diversification — the breadth of distinct securities held. It does not account for position weighting, correlation between holdings, or asset class mix. The median is reported rather than the average because it provides a representative view of typical investor behavior, particularly when the underlying distribution includes a wide range of holdings counts.
What M1 data shows
M1’s Median Holdings Count as of May 31, 2026: 13 positions
The median M1 investor holds 13 distinct positions in their portfolio, drawn from aggregate, anonymized data across M1. Cash-only accounts (investors holding no securities positions) are excluded from the calculation. ETFs are counted as single positions, matching the M1’s default Concentration Analysis feature. M1’s May 31, 2026 figure of 13 positions establishes a baseline for future read-outs, providing a reference point to track how holdings behavior across the platform evolves over time.
| Source | Median Holdings Count | Notes |
| M1 portfolios (May 31, 2026) | 13 positions | Aggregate, anonymized platform data, excluding cash-only accounts. As of 2026-05-31. |
This is not a recommendation for any specific number of holdings. Individual approaches to portfolio composition vary based on financial goals, risk tolerance, time horizon, and investment philosophy.
Why it matters
The Median Holdings Count is a starting point for portfolio review, not a target — it measures the breadth of distinct positions, not how well-diversified a portfolio actually is. Two portfolios with the same number of holdings can have very different risk profiles depending on what is held, how positions are weighted, and how correlated the holdings are.
Holdings count nonetheless provides a useful frame of reference. An investor with two or three positions has a very different risk profile than one with thirty — even if both feel comfortable with their approach.
Understanding the Median Holdings Count can help investors contextualize their own holdings count against typical platform behavior. It does not substitute for an individual evaluation of whether the composition aligns with goals.
What is the Top 3 Concentration?
The Top 3 Concentration measures the percentage of total portfolio value held in an investor’s three largest positions. It captures how much of a portfolio sits in its biggest holdings.
Top 3 Concentration = (Value of Three Largest Positions / Total Portfolio Value) × 100
Concentration is one of the more nuanced dimensions of portfolio composition. Some concentration is unavoidable and often intentional — investors may deliberately weight high-conviction positions more heavily. Concentration can also emerge as drift over time when winning positions outgrow others — though dynamic rebalancing counteracts this by restoring positions to target weights. Whether concentration is appropriate depends on whether it is deliberate and whether the investor understands the idiosyncratic risk it introduces.
What M1 data shows
M1’s Top 3 Concentration as of May 31, 2026: 54.8% (among investors with four or more distinct holdings)
The median M1 investor with four or more holdings has 54.8% of their portfolio value concentrated in their three largest positions, drawn from aggregate, anonymized data across active M1 accounts. The metric is calculated only for investors with four or more distinct holdings — investors holding three or fewer positions are mechanically 100% concentrated by definition and would distort the reading. M1’s May 31, 2026 figure of 54.8% establishes a baseline for future read-outs, providing a reference point to track how concentration behavior evolves over time.
| Source | Top 3 Concentration | Notes |
| M1 portfolios (May 31, 2026) | 54.8% | Aggregate, anonymized platform data. As of 2026-05-31. |
This is not a recommendation for any specific concentration level. Individual approaches to portfolio composition vary based on financial goals, risk tolerance, time horizon, and investment philosophy.
Why it matters
Top 3 Concentration is a measure of risk exposure, not a verdict on portfolio quality — concentration can be deliberate and appropriate, or it can be unintentional drift that exceeds an investor’s intended risk profile. High concentration may amplify idiosyncratic risk: when most of a portfolio depends on just a few positions, the performance of those positions may disproportionately drive its outcomes — in both directions.
A high Top 3 Concentration is not inherently problematic. It can reflect deliberate conviction, a tax-efficient hold-and-rebalance approach, or natural accumulation in long-term winners. At the same time, concentration that emerges from passive drift (without active management) may represent unintentional risk that does not align with the investor’s stated goals. Understanding portfolio-level concentration is the first step in deciding whether it remains appropriate.
The 54.8% median reflects aggregate behavior — not a target. Whether an individual investor’s concentration is appropriate depends on the type of holdings (individual stocks versus diversified ETFs), their conviction in those positions, tolerance for volatility, and broader rebalancing strategy.
What these metrics tell us together
Individually, each metric reveals one dimension of investor behavior. Together, they offer a broader view of how M1 investors approach wealth building:
- Cash Allocation Rate measures capital deployment — how much is invested versus uninvested
- Margin Utilization Rate measures borrowing behavior — how investors use leverage and liquidity tools
- Automated Investing Ratio measures discipline — how many investors have systematized their approach
- Median Holdings Count measures portfolio breadth — how many distinct positions investors hold
- Top 3 Concentration measures portfolio concentration — how much portfolio value sits in the largest few positions
Taken together, these metrics offer a view of M1 investor behavior across cash allocation, margin usage, automation adoption, holdings breadth, and portfolio concentration. M1 shares this data in the spirit of transparency — to help investors benchmark their own approach. All figures are aggregate and anonymized; no individual account data is represented or identifiable, and they do not represent a recommended allocation strategy. Individual approaches vary widely based on financial goals, risk tolerance, and life circumstances.
Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. This content is for educational and informational purposes only and does not constitute personalized financial advice. The data presented reflects aggregate platform trends and should not be interpreted as a recommendation for any specific investment strategy. Individual investors should consider their own financial situation and consult a qualified financial advisor before making investment decisions.
How M1 supports data-driven investing
M1 publishes aggregate, anonymized investor data because transparency is central to the platform’s approach. M1 offers automated investing, portfolio-backed borrowing through M1 Borrow, and a high-yield cash account — giving investors tools to manage how they deploy, borrow against, and hold capital.
See how M1 investors build Automated investing, portfolio-backed borrowing, and high-yield cash — all in one platform. Get started with M1
Frequently asked questions
The Cash Allocation Rate represents the aggregate percentage of total portfolio value held in cash across M1’s investor base. It is calculated by dividing total cash holdings by total portfolio value and multiplying by 100. The figure reflects anonymized, aggregate platform data — no individual account information is included or identifiable. This metric is for educational and informational purposes only.
Not necessarily. Cash serves important functions — emergency reserves, near-term spending needs, and rebalancing flexibility. A high Cash Allocation Rate may become a concern when it reflects unintentional idle cash rather than a deliberate strategy. The key question is whether the cash held aligns with the investor’s goals and liquidity needs. Conversely, holding too little cash can leave investors exposed to forced selling in downturns. Investing involves risk, including the possible loss of principal.
There is no single answer — the appropriate cash allocation depends on your financial goals, time horizon, risk tolerance, and liquidity needs. As a reference point, M1’s aggregate Cash Allocation Rate as of May 31, 2026 was 4.1% across active investors on the platform. Individual cash needs vary significantly. This is not a recommendation for any specific cash allocation level. Investing involves risk, including the possible loss of principal.
The Margin Utilization Rate reflects how much of their available margin capacity investors are actively using. The appropriate level varies widely — some investors use margin as a deliberate liquidity tool, while others keep it available as a backup and rarely draw on it. Margin borrowing involves risk, including interest charges that reduce net returns and the possibility of margin calls that may require liquidation of positions at unfavorable prices.
The appropriate level of margin varies by individual financial situation, investment objectives, and risk tolerance — there is no universal answer. As a reference point, M1’s aggregate Margin Utilization Rate as of May 31, 2026 was 41.9% among margin-eligible accounts. Margin carries significant risks, including interest charges that reduce net returns and the possibility of margin calls that may require selling securities at a loss. Investors should carefully consider their circumstances before using margin. M1 Borrow rates and terms are available at M1 Borrow.
Automation removes the manual step between depositing funds and putting them to work. Without it, investors must actively decide when and how to deploy each deposit — introducing the risk of delay or reactive decisions during periods of market volatility. By allocating funds automatically according to a target allocation, investors can maintain a more consistent contribution approach. Consistency of approach does not guarantee better outcomes, but it can reduce the influence of behavioral biases on investment decisions. Automation does not guarantee a profit or protect against loss, and all investing involves risk, including the possible loss of principal.
There is no single answer — the appropriate number of holdings depends on financial goals, risk tolerance, time horizon, and investment philosophy. As a reference point, M1’s Median Holdings Count as of May 31, 2026 was 13 positions across active M1 accounts. Individual approaches to portfolio composition vary significantly. This is not a recommendation for any specific number of holdings. Investing involves risk, including the possible loss of principal.
There is no universally correct answer — the appropriate concentration level depends on conviction in specific positions, tolerance for volatility, time horizon, and whether holdings are individual stocks or diversified instruments. As a reference point, M1’s Top 3 Concentration as of May 31, 2026 was 54.8% for the median investor with four or more holdings. Concentration carries risk: when a few positions make up most of a portfolio, the performance of those positions disproportionately drives returns. This is not a recommendation for any specific concentration level.
As of May 31, 2026, M1’s investor portfolio allocation data shows a Cash Allocation Rate of 4.1%, a Margin Utilization Rate of 41.9% among margin-eligible accounts, an Automated Investing Ratio of 82.8%, a Median Holdings Count of 13 positions, and a Top 3 Concentration of 54.8% among investors with four or more holdings. These aggregate, anonymized figures reflect platform-wide behavior and do not represent any individual account or constitute a recommended allocation strategy.
This May 31, 2026 snapshot represents an early look at aggregate investor behavior on M1’s platform. Future data publications will depend on investor interest, data quality, and the value this information provides. M1 is committed to transparency and plans to evaluate expanding this reporting over time.
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