Bullish investors pile into stocks as cash levels sink to record low

Traders work on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on Dec. 16, 2025. Photo by CHARLY TRIBALLEAU / AFP via Getty ImagesArticle contentGlobal asset managers’ cash holdings have fallen to a record low in a sign of investors’ bullishness about the AI-fuelled stock market rally, despite recent jitters over big tech valuations.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentAverage cash holdings in portfolios dropped to 3.3 per cent in December, down from 3.7 per cent in November, according to a closely watched survey of fund managers by Bank of America — the lowest level since the survey began in 1999.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle contentInvestors have poured money into stocks and commodities, with a net 42 per cent of fund managers overweight equities, the highest level since 2022, the survey showed. The proportion of fund managers overweight technology stocks also reached the highest level for more than a year, despite benchmark indices already being heavily weighted towards the sector.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Even at the height of previous bubbles, investors did not dare to go to these levels” of cash allocation, said Elyas Galou, investment strategist at BofA. “It means positioning is fragile to any bearish developments…any bad news is going to do a lot more damage.”Article contentU.S. stocks are trading close to record-high levels, having bounced back from the April slump that followed U.S.

President Donald Trump‘s salvo of global tariffs, powered by tech stocks’ storming rally and hopes of lower interest rates.Article contentHowever, the rally has shown signs of wavering in recent weeks, as nervousness over lofty valuations of big U.S. tech companies has spooked investors.Article contentDespite those fears creeping into markets, the survey showed that fund managers are at their most bullish since mid-2021, according to a measure calculated using cash levels, equity allocations and global growth expectations.Article contentArticle content“Investors are clearly more positive into 2026 and positioning has moved higher,” said Emmanuel Cau, head of European equities strategy at Barclays. “The bar for positive surprises has likely moved higher,” he added.Article contentRead More Nasdaq seeks SEC approval for 23-hour trading This TSX stock was up 17% this week Article contentThe Bank of America measure of optimism exceeds even the heights of the “Trump trade” at the end of 2024, as investors piled into U.S. stocks and the dollar in anticipation of a market-friendly presidency. Expectations of global corporate profits, too, are at their highest level since 2021 — highlighting the role of strong earnings growth in fuelling investor bullishness.Article content“The market is definitely bulled up,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management. “After a year of having all kinds of policy uncertainties, and a big stagflation scare which has now faded, investors are looking ahead…When I look ahead, I want to err on the side of being more constructive.”Article contentThe possibility of an “AI bubble” remained the biggest market risk identified by investors in December, although the proportion of managers naming it as their top risk dropped from 45 per cent in November to 38 per cent in December.Trending Is a $2.75 million portfolio enough for Halifax empty nesters to retire early?

Personal Finance World watches as Ottawa's bullish shift on LNG puts wind at the back of two major projects Oil & Gas Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance The Federal Reserve’s rate cut was a clear signal to investors Investor Article contentKevin Gordon, head of macro at Charles Schwab, said the “continued build in optimism” evidenced by fund managers’ low cash levels “makes the market a bit more vulnerable to sharper pullbacks in the event of negative news”.Article contentThe survey also showed that a growing proportion of investors expect long-term interest rates to be higher in 12 months’ time, and three-quarters of managers expect yield curves to steepen over that period.Article contentBofA’s Galou pointed out that “it is difficult to square the circle” between investors’ bullishness on the equity market rally and the expectation of higher bond yields.Article content“The big question is: can global equities do well if bond yields rise above 5 per cent?” he asked.Article content© 2025 The Financial Times LtdArticle contentShare this article in your social networkComments Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Is a $2.75 million portfolio enough for Halifax empty nesters to retire early?

Personal Finance World watches as Ottawa's bullish shift on LNG puts wind at the back of two major projects Oil & Gas Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance The Federal Reserve’s rate cut was a clear signal to investors Investor