Global funds still recommend bonds over stocks: Reuters poll

davfor

Global fund managers tilted towards bonds in March and don't hold much near term hope for a sustained stock market rebound....

Global fund managers are convinced the world economy is already in recession, and recommended increasing bond holdings in March to the highest level in at least seven years while buffering up on cash at the expense of equities, a Reuters poll showed.

“The recent fall in equities reflects the wrongdoings over the past decade such as share buy-backs at a time when investment growth was warranted."

“The monumental scale of stimulus announced by central banks can only bring bond yields lower."

Asset managers reduced recommendations to equity exposure to the lowest since September, to 45.9% of the model global portfolio from 49.1%. Cash holdings were increased to the highest since October, to 5.2% from 3.8%. Asked on the outlook for equities over the next three months, nearly 90% of respondents said stocks would fall further or stay around current levels.

U.S. funds suggested a cut to equity exposure to the lowest in Reuters poll records for that country going back to early 2011 and an increase to bond holdings to the highest since then.

https://reuters.com/article/us-funds-global-poll/global-funds-still-recommend-bonds-over-stocks-reuters-poll-idUSKBN21I1PO

MikeW

Interesting @davfor ... maybe a good contrary indicator although the news is clearly going to be bad on equities for a couple of months.... hard to add to equities here

Sven

Got to love their analogy to the phase catching falling knives.

“Trying to call the bottom of the market and carefully buying is like picking up pennies in front of a steamroller,” said Peter Lowman, chief investment officer at Investment Quorum in London.

“The likelihood is that we might become rangebound over the coming three months, but that won’t stop markets giving investors a rollercoaster ride.”

MikeW

Hah! love it @Sven

JoJo26

MikeW said:

Interesting @davfor ... maybe a good contrary indicator although the news is clearly going to be bad on equities for a couple of months.... hard to add to equities here

Success comes from being comfortable being uncomfortable. Just because something is hard to do, doesn't mean it isn't the right decision.

davfor

@MikeW I don't have a sense for how far along we are in the correction (or crash) process. My simple minded approach is to DCA 2% of my available cash each week into either the bond side or the stock side of my holdings. Given the recent surge on the stock side, next week the bond side may wind up receiving an injection. More dividends come in every month, so my cash is somewhat replenished each month. If it drops to maybe 50% of where it is now before the horizon clears, I will probably reevaluate this approach.

Old_Joe

Nomination for Weasel Phrase of the Week award:

"The likelihood is that we might"

Note: To be eligible for this coveted honor the phrase must have a Weasel Rating at least equal to that of the President of the United States.

Crash

@Old_Joe yessir. Funny, you. I like it!