To the surprise of the apparently cautious Wall Street analysts and hedge fund managers, stocks continued higher last week. Fund managers are holding a higher level of cash as they have a list of reasons why stocks can't go any higher.
In last week's column Are Wall Street Pros Too Negative? I pointed out that a recent survey of Wall Street strategists revealed they are recommending that their clients have just 51% in stocks. This is a level that has signaled a 22% gain in the following year.
The public also seems to be oblivious to the stock market as a Wells Fargo/Gallup poll in June and early July made it clear that the small investor is not paying attention to the stock market.
Surprisingly, "the survey shows that while the majority of investors (64%) do know that stocks increased on average in 2013, barely a quarter (24%) believe they increased by 20% or better, and only 7% are aware that the average increase was in the 30% range. The largest proportionâ??37%â??believe stocks increased by 10%, while another 21% think stocks were flat and 9% think they decreased."
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