April 6, 2021

Bank of America’s Sell-side indicator that tracks equity allocation increased to 59.4%. It’s the
third month in a row on the rise. This puts it within one percentage point from the bearish sell
sign and its highest level since 2007. This would be contrarian as investors are bullish on stocks
as both S&P 500 and Dow Jones are trading at or near all-time highs. Investors should be
cautious because stimulus and a strong economy are already priced into the market. But
investors looking to hedge might be wise to hold off or look for cyclical or value funds, rather
than a full-blown exit. Although volatility should be expected to resume nonetheless in the
second half of the year as the economy settles back to normal.

(New York)

FINSUM + Magnifi: It’s preemptive to dip into bearish territory yet, but investors would be wise to add some value back in their portfolio. P/E ratios are at extremely elevated levels and cheap stocks are a solid
hedge.

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