What Investors Consider the Biggest Risk to Markets Right Now The risk of a trade war triggering a global recession is a pressing concern for investors, as it threatens economic growth, financial stability, and market confidence. Image: Yahoo Finance
Investor Sentiment (Retail & Institutional Composite) vs. S&P 500 Index Markets typically reach their correction lows when combined investor sentiment is extremely negative, setting the stage for a potential rebound. Image: Real Investment Advice
AAII – U.S. Retail Investors Allocation to Stocks, Bonds and Cash High equity allocations and low cash positions don’t always mean a market reversal is near. However, they suggest that much of the market’s potential gains may already be priced in, as investors have heavily committed to equities. Image: Real Investment Advice
U.S. Equities – Foreign Investors’ Net Portfolio Equity Flows Foreign investors’ recent behavior in U.S. equities—marked by limited activity and stable portfolio allocations—suggests a long-term bullish outlook on the resilience of the U.S. market. Image: Deutsche Bank
Cash Allocation by Non-Bank Investors Globally While cash was once considered king, non-bank investors globally have significantly reduced their cash allocations, reaching levels not seen since at least 1999. Image: J.P. Morgan
Cumulative Flows from Global Investors into DM and EM funds In 2024, equity funds in developed and emerging markets have experienced substantial inflows from global investors, reflecting a resurgence of confidence in the market. Image: Goldman Sachs Global Investment Research
FMS Investors – Biggest “Tail Risk” Concerns about geopolitical conflict have risen among FMS investors, with 33% now viewing it as the biggest “tail risk” for the global economy, primarily due to its potential negative impact on financial markets and investments. Image: BofA Global Fund Manager Survey
FMS Investors – Average Percentile Rank of Growth Expectations, Cash Allocation, Equity Allocation The decline in pessimism among FMS investors is viewed as a positive indicator, suggesting a growing willingness to embrace risk. Image: BofA Global Fund Manager Survey
FMS Investor Positioning Global FMS investors have overweighted their exposure to utilities, bonds and telecoms compared to historical levels, while reducing their exposure to cash, energy, materials and tech. Image: BofA Global Fund Manager Survey
How FMS Investors Believe the Global Economy Trends Will Be in Next 12 Months 50% of FMS investors expect stagflation in the global economy over the next 12 months, marked by stagnant growth and high inflation, while 34% foresee stagnation, leading to a cautious investment approach. Image: BofA Global Fund Manager Survey
FMS Investors – Net % Taking Higher than Normal Risk Levels In September, FMS risk appetite has significantly decreased, reaching a 11-month low. This decline reflects growing concerns among FMS investors regarding economic stability and market conditions. Image: BofA Global Fund Manager Survey