Strategists Turn Slightly More Bullish

Below we highlight the consensus strategist recommended stock and bond allocation as measured by Bloomberg's weekly Wall Street strategist survey. After stocks began dropping in late 2007, strategists followed by lowering their recommended stock allocation. By the time the market bottomed in March, strategists had lowered their recommended stock allocation down to just 50%, which was a low for the 12-year survey. Since the market has now rallied 40%, strategists have just recently bumped up their target stock allocation to 52.4%. Better late than never, right?

On the other hand, strategists had been increasing their recommended fixed income allocation since mid-2007 as well. Their target bond allocation reached a record high of 39.1% in early March, but since then it has dropped just a bit down to 38.1%. If investors were following these recommendations by selling stocks during the market decline and buying Treasuries, they can't be very happy now that Treasuries are tanking and stocks are up.

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Comments

[jeremiah74:]

sell side strategists are an excellent contrqa-indicator
the other excellent contra-indicator is the economic surprise index, more precisely the tendency of economists to herd and consistently adapt their forecasts to the point where those become overly optimistic, and then the same repeats on the downside.. and then it starts all over again

Jun 12 05:48 AM

[Alphameister:]

Let's hope those reversals of trend are enduring! What would contrary opinion fans do without those strategists around to lead the masses astray?

Jun 12 01:14 PM