I had to do a double-take recently when reading a CNBC headline that stated: “The only reason to be bearish is there’s no reason to be bearish.”
It is indeed hard to argue the point. As the article explained:
“A majority of investors finally agree the V-shaped recovery is at play,” according to the Bank of America Global Fund Manager Survey. Plus, a record percentage of money managers believe that global growth is at an all-time high.”
- More than 90% of investors believe the economy will be more robust in 2021, with a consensus it’s a V-shape recovery. For the first time since January 2020, chief investment officers want to increase capital spending rather than improve balance sheets.
- Fund managers’ allocation to cash is down to 3.8%, the lowest since March 2013. Such was just before the “taper tantrum” era under former Federal Reserve Chairman Ben Bernanke.
- Allocations to stocks and commodities are the highest since February 2011.
- The survey shows a preference towards cyclical stocks, high exposure to commodities, emerging markets, industrials, and banks relative to the past 10-years.
Only 13% of respondents said stocks are in a bubble.
As the survey notes:
“Stocks are hovering around all-time highs as investors bet on a successful rollout of the Covid-19 vaccine, economic reopening, and expectations for more fiscal stimulus.”
What could go wrong?