A Thomson Reuters analysis of the 30 largest fundamental hedge funds has found that these major players slashed their risk exposure to the stock market in the second quarter, by opting for defensive stocks such as dividend-payers or utilities, or by shifting away from cyclical industries such as materials and energy.
"You're not in that investment mindset of a few years ago any more, and a lot of risk has been taken off the table already," said Steve Goldman, senior market strategist at Weeden & Co in Greenwich, Connecticut. "The consumer is in dire straits, the economy's resilience has been disappointing, and everybody's bracing for it."
So major hedge funds aren't bullish.
U.S. retail investors have also been largely sitting out the stock market since the crisis, according to the Financial Times. So retail investors aren't bullish.
Barry Ritholtz at The Big Picture also notes that even Wall Street analysts have 'turned excessively bearish' relative to their usual song and dance. Fewer than 29% of stock recommendations worldwide are 'Buys' according to Bloomberg, which is the lowest level since at least 1997. Even analysts aren't bullish.
Meanwhile, U.S. equity mutual funds have experienced a multi-year outflow of investor capital based on tracking data from the Investment Company Institute, as we've discussed many times previously. Your average 401k'ers, who represent the largest wall of money out there, hasn't been bullish on stocks for ages... and instead has been pouring money into bond funds. Equity mutual funds have been a lost cause for ages.
So, really, who is bullish on stocks right now? Nobody is...
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