BofA warns stock market bulls should consider reining in aggressive buying behavior

Odaily Planet Daily News According to the latest Bank of America fund manager survey, global investors who have been aggressively buying stocks should consider reducing their portfolio exposure. The bank's strategists pointed out that asset allocators have become extremely bullish—which is often a warning signal for the market. The proportion of cash held by investors has fallen from 4.1% of assets last month to a "very low" level of 3.6%. Meanwhile, U.S. stock holdings are at their highest level since December 2024, with a net overweight of 24%.

In a report, the team led by Michael Hartnett wrote: "Bank of America's 'Bull & Bear Indicator' reading is as high as 9.4 (the indicator ranges from 1 to 10), which is in the extremely bullish range, suggesting that exposure to stocks and high-beta assets should be reduced. Due to overly optimistic market positioning, the room for further upside in risk assets during the summer will be limited." (Jin Shi)