Feb 18, 2025 - Economy

Investor fears on overvalued U.S. stocks at 24-year high, BofA says

Ben Berkowitz

Illustration of the Wall St. bull with stock market arrows instead of horns. — Illustration: Gabriella Turrisi/Axios

The share of investors who think U.S. stocks are overvalued is at a 24-year high, according to a new BofA Global Research survey out Tuesday.

Why it matters: As well as U.S. stocks have done in the last couple of years, there's more concern than ever about how highly concentrated the market is, and what happens if the "Magnificent 7" driving those gains lose their luster.

The big picture: 89% of respondents to BofA's monthly Global Fund Manager Survey said U.S. stocks are overvalued, the highest in data going back to April 2001.

The "U.S. exceptionalism" trade, as BofA calls it — conviction in a combination of strong U.S. stocks and a strong dollar — fell in February from a three-year high in January, suggesting confidence has peaked.
"Global equities" now rank as the asset class expected to perform best this year, per the survey, ahead of gold, U.S. stocks, bitcoin, and government bonds.

By the numbers: Through Friday, the MSCI World ex USA Index —which captures the world's largest developed stock markets other than the United States — was up 8.2% this year, doubling the performance of the S&P 500.

Yes, but: Investors are bullish overall, even if they're not in love with domestic stocks.

Cash on hand among survey respondents is at the lowest level in 15 years, a strong sign investors are putting their money to work.
Fears of a global recession fell to a three-year low in the survey, and overall sentiment rose slightly.

Add Axios on Google

Investor fears on overvalued U.S. stocks at 24-year high, BofA says

What to read next