Perish the Thought – Stocks Might Fall


You almost have to re-read the small print for a reminder that stocks may ever fall again.

The oft-used compliance disclaimer that the value of your investments may go down as well as up seems to be largely ignored by stock investors this days.

And after a three-year winning streak, fund managers are clearly betting on another.

Bank of America’s penultimate monthly fund manager survey of 2021 shows the biggest overweight U.S. equities in eight years – with as few as 8% of the 388 respondents, managing more than $1 trillion in assets, claiming to be underweight stocks at large.

And a weekly JPMorgan client survey had 60% planning to add even more equity exposure over the coming days and weeks.

As 2022 investment outlooks from banks and funds stream in, the basic arguments for sticking with stocks are pretty simple.

If a global pandemic and the sharpest economic contraction in a generation didn’t spark a negative year for expensive equity indices – many wonder just what will right now.

Keep riding the liquidity swell until it’s finally drained still seems to be the consensus.

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