Investor Risk Appetite Wanes

• May 19, 2022
• Brad Lamensdorf
• Chart of the Week

By John Del Vecchio and Brad Lamensdorf

As a sign a big bounce could be coming, investors have little appetite for risk. As the chart below from BofA Global Research shows, the percentage of investors taking higher than normal risks has plunged to nearly 2009 levels and are among the lowest this century.

Meanwhile, the average cash position of fund managers has hit the highest level since the 9/11 terror attacks.

While the market volatility may be far from over and lower prices could be seen in the future, the market sentiment is extremely bearish and indicators are pressed to the floor.

A bear market rally is overdue.