Bank of America has raised concerns about increasing risks on Wall Street as investor cash levels hit record lows.
In BofA’s latest Global Fund Manager Survey for December, it was revealed that global investors are holding just 3.3% of their portfolios in cash, marking the lowest level ever recorded, as reported by Barron’s.
The survey also shows that allocations to stocks and commodities are at their highest levels since February 2022, indicating a strong optimism for economic growth not seen in nearly four and a half years.
Bank of America’s historical data suggests that such market conditions have often preceded weaker equity performance.
The firm recommends buying global stocks when cash allocations rise to 5% or higher, and selling equities when cash holdings drop below 4%. Currently, cash levels are well below that threshold.
“Liquidity is currently at its peak, which has been supporting the stock market in 2025, with a lot of capital chasing a limited number of investment opportunities,” noted Bank of America’s head of US equity and quantitative strategy, Savita Subramanian, in a separate report referenced by Barron’s.
Subramanian predicts fewer interest rate cuts from global central banks in 2026 and suggests that government stimulus may dwindle as US debt-to-GDP ratios reach historically high and concerning levels.
The survey also reveals that fund managers are holding their largest overweight position in equities since December of the previous year, with the technology sector remaining the most favored.
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