Stockholdings amongst U.S. households elevated to 41% of their complete monetary property in April, the best stage on file. That’s based on

JPMorgan Chase

& Co. and Federal Reserve knowledge going again to 1952 that features 401(okay) retirement accounts. JPMorgan’s

Nikolaos Panigirtzoglou,

who analyzed the info, attributed the elevated allocations to appreciating share costs alongside inventory purchases.

The keenness for shares comes as market volatility has been edging decrease and the S&P 500 has hit 25 data this 12 months, fueled by a stellar earnings season and the prospect of an financial restoration that’s speedier than many predicted. In the meantime, stimulus checks have fueled a file rise in family incomes, boosting spending and serving to propel the restoration.

Within the coming week, the month-to-month jobs report and earnings outcomes from firms like

Uber Applied sciences Inc.

will present clues in regards to the energy of the restoration.

Tens of millions of latest brokerage accounts had been created through the Covid-19 pandemic and a few buyers who first tried their arms at inventory or choices buying and selling over the previous 12 months have caught round, including to their investments. Monetary advisers and cash managers stated their purchasers have grown extra snug holding shares as they witnessed the highly effective rally over the previous 12 months, with some even questioning why they want bonds of their portfolios with yields nonetheless so low.

Many buyers have guess in the marketplace by passive investments and have discovered over the previous decade that it doesn’t pay to ditch inventory holdings in instances of market turmoil.

The steadily rising market—just lately lifted by spectacular earnings from firms like

Fb Inc.

and

Alphabet Inc.

—has drawn much more buyers in. Retail purchasers at

Financial institution of America Corp.

have purchased shares for 9 consecutive weeks, whereas hedge funds and different huge buyers have just lately fled the inventory market, analysts on the financial institution stated in an April 27 observe.

Damon White, a 44-year-old doctor assistant primarily based in Sewell, N.J., stated he began studying about shares and choices by social media platforms like TikTok whereas he was furloughed from his job final 12 months.

He’s again at work however says he nonetheless steadily checks in on his investments, just lately pouring hundreds extra into the market, significantly in shares like Apple,

Tesla Inc.

and

American Airways Group Inc.,

bringing his complete stockholdings to greater than $400,000.

“It was nerve-racking once you’re placing in a considerable amount of cash,” Mr. White stated. However, “if in case you have a fast finger, you’ll promote…and also you’ll lose out in the long run.”

He doesn’t maintain any bonds and plans to maintain placing cash into shares.

Many particular person buyers haven’t been deterred by the market’s swoons. Information from analysis agency Vanda Analysis present that particular person buyers have a tendency to purchase extra shares when the S&P 500 is down 1% on the day than when it’s up by the identical quantity, and that their resolve to purchase throughout selloffs has strengthened through the pandemic. Some have even borrowed to amplify their stock-market bets.

David Sadkin,

a associate at Bel Air Funding Advisors who oversees $4.6 billion for rich purchasers, stated the share of their cash that’s sitting within the inventory market has elevated to about 65% from roughly 45% final 12 months, whereas he has whittled down investments in bonds. As his bondholdings mature, he has regularly reinvested the cash into shares.

The yield on the 10-year Treasury observe settled at 1.632% Friday, up from round 0.915%, the place it began the 12 months, however nonetheless a low stage traditionally.

“To be able to obtain our purchasers’ targets, we have to tackle extra threat,” Mr. Sadkin stated. “We intend to proceed to reallocate into threat property whereas rates of interest keep this low.”

Different buyers have been much more aggressive. A survey by the American Affiliation of Particular person Buyers confirmed that buyers’ allocations to the inventory market hit round a three-year excessive of 70% in March. And margin debt—or cash that buyers borrow to purchase securities—stood at a file as of March, Monetary Trade Regulatory Authority figures present.

Randy Lee, a 31-year-old software program engineer primarily based in Lansing, Mich., stated he was initially drawn to the short thrills of choices buying and selling, witnessing his small investments roughly double or triple inside hours.

Now, he says he nonetheless performs within the choices market but in addition holds “boring” shares like

Royal Caribbean Group

and

Kraft Heinz Co.

Jolted by the uncertainty of the pandemic, he additionally began stashing away more cash in his retirement account. He doubled his biweekly contributions to the account and opened a Roth IRA account, which he has added to in current weeks. Most of his holdings are within the inventory market.

“I simply by no means had that a lot time to only sit at residence and take a look at these things,” stated Mr. Lee. “What higher place to create cash like everybody else than to start out taking part in the inventory market.”

He’s optimistic about shares, significantly after seeing the tech behemoths report file earnings final week. However he does fear a couple of market crash sooner or later and has purchased some cryptocurrencies, which he views as a hedge towards a downturn.

He isn’t alone—the rising costs of every part from lumber to dogecoin to shares has triggered worries a couple of market bubble. And to some analysts, the exuberance surrounding the inventory market is flashing a warning signal.

“Retail buyers have made some huge cash on many issues together with equities over the previous 12 months. Sooner or later, given how excessive their fairness allocation is, the danger is that they determine to get out and take earnings,” stated Mr. Panigirtzoglou, a managing director at JPMorgan. “That’s successfully what occurred earlier than in 2000.”

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com