Despite what I think are high valuations all over – incl. India – it seems the world is happy to shore up investments! In India, I found the investments to be unsustainable!
Investors made few changes in their allocations in December but headed into 2006 with close to twice as much exposure to equities as to bonds, Reuters polls showed on Wednesday.
Surveys of 44 leading fund management companies in the United States, Japan, Britain and continental Europe showed average stocks holdings at 62.0 percent, barely changed from 61.9 percent in November.
Bond holdings were unchanged at 31.4 percent and cash remained steady at 3.9 percent. Property and alternative investments made up the remainder.
It marked the highest level of exposure to stocks since March 2005 and kept bonds at the lowest level since April 2005.
The findings suggested that investors are fairly bullish as they move into the new year, willing to take some risk despite expecting a mild economic slowdown some time in the year.
“Overall, equities are still quite fairly valued … I don’t think people will be massively more defensive this year,” said Michala Marcussen, associate strategy director at Societe Generale Asset Management in Paris.
Investors are generally expecting corporate earnings to remain robust enough for stocks to outperform fixed income.
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