Big investors are still high on stocks
Fund managers are hoarding equities, overlooking what even they admit are fairly lofty valuations.
Just how bullish are fund managers these days?
So much so that they are aggressively positioning for a second-half upturn in the global economy, according to the latest survey from Bank of America Merrill Lynch, out Tuesday.
Among those global asset allocators surveyed, a net 61 percent are now overweight equities. That difference between those who are overweight versus those that are underweight is the survey's highest reading since early 2011, and the second-strongest response ever for the bank's monthly report that takes the pulse of fund managers.
Investors are willing to overlook what even they see as fairly lofty valuations, along with tail risks. A net 21 percent of managers in the July survey regard stocks as overvalued, the survey’s highest reading since 2000.
The biggest tail risks they see are a no-one-can-predict geopolitical crisis and China debt defaults.
"Improving investor sentiment on global growth, inflation, equities and risk-taking are all testament to a potential macro normalization in the second half. This could eventually feed into a normalization of rates. If growth does pick up, volatility will rise too," says Michael Hartnett, chief investment strategist at BofA Merrill Lynch Research.
A net 69 percent expect the world economy will strengthen over the next year, even has a growing number of investors now see inflation moving above trend levels while growth is below trend.
Where oh where to invest? Investors are pinning their hopes on a global re-acceleration, which they hope will ignite European growth. They'e also postponed timing on anticipated quantitative easing by the European Central Bank. And Germany, the economic heavyweight of Europe, is falling out of favor, the survey showed. Another chink in the country’s armor came Tuesday, with the seventh drop in a row in German investor confidence.
The eurozone periphery is also leaving fund managers a bit cold. Meanwhile, emerging-market equities are under-owned relative to history, and also most undervalued in 13 years.
As for sectors, managers on the whole rotated in July out of telecoms, pharma and the eurozone to tech, banks, Japan and are NOT underweight global materials for the first time in 18 months. Overall positions are less extreme than six months ago.
And the most crowded trade is U.S. high yield, overtaking periphery EU debt.
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Well the Middle-East will be a War Zone for the foreseeable Future. Outside of a Nuclear War, it really doesn't matter. China's Debt problems, how about those in Japan, Euro-Zone, and Here in America. Funny how the so-called smart Money is pretty much Dumb Money in the Long Haul. Without continual Government intervention/bailouts, that FACT would already be evident to all.
The Big Bank have only gotten BIGGER while Global Debt has Soared since the Great Recession. Yet just about everyone in the Mainstream Media has yet to leave the Alice in Wonderland World built on Crack Dollars. Eventually they will have no other choice but to Deal with the Coming Realities of robbing Paul to pay Peter.
"fairly lofty evaluations"?
That's one way to look at it. How about sky high valuations based on absolutely no fundamentals at all, like ACTUAL earnings per share (excluding phony earnings per share based on stock buy backs)
Everyone goes on with warnings and doom and crashes to come. Well caution is always a good idea. Obama's binge on borrowed money is a disaster for the U.S. at some point. If you deny this, deny that the ONE TRILLION dollars each year that will be necessary to pay the interest on Obama's debt once interest rates return to normal will not be very very bad and very bad for all the social programs in America, you are a fool or an idiot. All that said, MAKE HAY WHILE THE SUN SHINES!!!
If I listened to all of you over the past four years my net worth would be ONE HALF, yes ONE HALF of what it is today. Just the facts! Hmm? who has been right? I know the answer to that question. That said, there will be a day that we will pay for Obama's train wreck! That is also a fact. But make hay now. There will be another market correction, there always are, but timing such is difficult. Had I tried I would be far far poorer today than I am. Just a fact again.
Buy stable companies.
Buy consumer staple firms.
Avoid companies dependent on discretionary spending.
Use stop Loss orders (don't ride it down when it turns)
Hedge your portfolio
Or you can sit on the side lines and be poor.
"...Federal Reserve concerns about valuations for some social-media and biotech companies. "
"Fund managers are hoarding equities, overlooking what even they admit are fairly lofty valuations."
Gee, sounds to me like the Fed and fund managers are kind of admitting that they've contributed to a bubble. Is this MSN's odd way of trying to give its readers a heads' up??
Well none are bigger investors/speculators then the Corporations themselves. For Instance, Over the last decade Intel has spent almost $90 billion towards shareholders through dividends and share repurchases.They just approve a $20 Billion Dollar Share Repurchase Plan.
Also, why is it that the same posters that claims to not care thumbs up or down are the same folks that whine the most about thumbs up or down. Exactly.
Today was a good day to buy some stock...At least Tobacco Stocks..
Some got beat down by 6% or so....Mostly fraidy cats, taking a little profit..
When others are fearful, get greedy...We did and added to positions, it pays about 5%+ or so.
We will get paid to watch it go back up, we hope soon...
Yup, old Roubini has been getting restless, and he doesn't want to be the only one missing/guessing a correction...Guess it might be 9-15 months away, I'm going to run with that.
Facts...Funny that people (for lack a better name) would thumb down Mr. DoinFine..??
Maybe they just don't know how to be happy for someone else that took the risk (very slight);
And manage to gain on the system...GOOD for him. If he had stuck with the Naysayers the last 5 years or so, he would be full of Doom&Gloom just like they are...GLAD I'm not THEM...
Looks like you have done okay also...That's a "good thing".
And with us that makes at least 3 on here that are proving the D&G crowd wrong...
At least until they finally get a failure or a downturn......Let them just keep "thumbing away"...
Wonder if they can read this )- just turn your head sideways doomers, it's easy, yuk, yuk.
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These hot movers could rise by double digits in coming months.
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