Bank of America is flagging rising risks on Wall Street as investor cash levels fall to record lows.
BofA’s December Global Fund Manager Survey shows global investors holding just 3.3% of their portfolios in cash, the lowest level ever recorded, reports Barron’s.
The survey also finds allocations to stocks and commodities at their highest levels since February 2022, reflecting the strongest optimism for economic growth in nearly four and a half years.
According to Bank of America’s own historical framework, such conditions have often preceded weaker equity performance.
The firm advises buying global stocks when cash allocations rise to 5% or higher, while recommending selling equities when cash holdings fall below 4%. Current levels are well beneath that threshold, the report notes.
“Liquidity is likely as good as it gets, which has buoyed stocks in 2025, with lots of money chasing a few ideas,” Bank of America head of US equity and quantitative strategy Savita Subramanian says in a separate report cited by Barron’s.
Subramanian says she expects fewer interest rate cuts from global central banks in 2026 and adds that government stimulus is likely to fade as US debt-to-GDP levels reach historically high and uncomfortable levels.
The survey also shows fund managers carrying their largest overweight position in equities since December of last year, with technology remaining the most favored sector.
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