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Active Managers Move Back 'All In' On Stocks
12-10-2016, 05:01 PM,
#1
Active Managers Move Back 'All In' On Stocks
Active Managers Move Back 'All In' On Stocks

<p><a href="http://jlfmi.tumblr.com/post/154288138340/active-managers-move-back-all-in-on-stocks"><em>Via Dana Lyons' Tumblr,</em></a></p>
<p><strong><em>Active managers have adopted an average of over 100% exposue to stocks; such exuberance has not been necessarily represented a poor bet in the past, however.</em></strong></p>
<p>The jury is out on whether investors have embraced the &ldquo;Trump Rally&rdquo;. While there is some evidence that investors and money managers remain under-invested, there is probably more evidence to the contrary. From jacked-up surveys to record ETF inflows, it&rsquo;s probably safer to conclude that folks are pretty enthusiastic about stocks right now. <strong>One specific example comes from the National Association of Active Investment Managers (NAAIM) survey of active manager equity exposure. </strong>This week, based on the survey, these active managers have an average of 101.6% exposure to equities. I&rsquo;d say that&rsquo;s pretty high.</p>
<p><img alt="image" src="http://68.media.tumblr.com/20ddedc3159b03adc756a57c18cefe5d/tumblr_inline_ohz4m6prZn1sq14jh_500.jpg" style="width: 601px; height: 400px;" /></p>
<p>&nbsp;</p>
<p>Now, don&rsquo;t go and sell all of your stocks just yet based on a contrarian analysis of this data point. That&rsquo;s because the previous &ldquo;all in&rdquo; bets by these managers didn&rsquo;t exactly lead to disastrous results.</p>
<p><img alt="image" src="http://68.media.tumblr.com/82f3af80f656a5582638e7e74fec01cb/tumblr_inline_ohz4v7WIjP1sq14jh_500.jpg" style="width: 600px; height: 228px;" /></p>
<p>In fact, on a 3-week, 1-month and 6-month basis, the S&amp;P 500 was higher each time following these &gt;100% readings. And only this past July&rsquo;s reading led to a negative 3-month return, barely.</p>
<p><strong>So there certainly may be valid reasons to expect a pause in the enexorable Trump Rally, overexuberance by these NAAIM managers isn&rsquo;t necesarily one of them.</strong></p>
<p>*&nbsp; *&nbsp; *</p>
<p><em><a href="http://jlfmi.tumblr.com/About" target="_blank">More</a> from Dana Lyons, JLFMI and My401kPro.</em></p>


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