Institutional fund managers are reducing cash allocations and increasing equity holdings, signaling a possible market decline.

From Investing.com: 2024-12-23 04:39:00

Institutional fund managers are holding record low cash allocations and increasing equity holdings, a contrarian indicator that a market decline could be near. Bank of America reports 36% of fund managers are overweight stocks. Bloomberg notes that historically, every time BofA’s sell signal was triggered, the MSCI All-Country World Index experienced losses of 2.4% the following month. Market trading has been volatile, with the recent Federal Reserve meeting causing a shock by revising interest rate outlooks. A potential Government shutdown has also impacted markets, but historically, shutdowns have had a mild and short-lived effect. As the year-end approaches, investors should manage risk and not stretch for further returns.



Read more at Investing.com: Cash Allocations Send an Ominous Signal