The Reason Why Investors Are Pulling Money Out of Stocks

Posted On February 12, 2019 2:43 pm
By: Steve Smith

Despite the near-record rally over past few weeks, investors have been pulling money out of stocks and piling it into cash.

The major indices have rallied almost 20% since their December low and money managers are seemingly using this opportunity to reduce equity exposure, especially in U.S. stocks.

According to a BankAmerica survey, equity allocations in February fell to their lowest level since September 2016, indicating a lack of conviction in the sustainability of the rebound.

Notably, the money isn’t being rotated into other asset classes such as real estate, commodities or even bonds, with a duration beyond 2 years. Instead, it’s…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.