Another Survey Finds that Investors Still Don't Believe the Bull Market is For Real

In March, Bespoke Investment Group conducted a survey of its subscribers to gauge overall market sentiment. There were 299 respondents with 203 of those identified as institutional investors. 

It doesn’t appear that the market is full of blind, bullish optimism like some would suggest. Roughly 53.5 percent of respondents believe that the market will be lower one month from now with institutional investors more bearish than individuals. 61.5 percent of the 53.5 percent were what is often called the "smart money."

The survey found that the majority of respondents believe that the big gains are in: 39 percent believe that six months from now, the market will be up 0-5 percent while 37.8 percent believe that the market will be lower (18 percent believe a more than 5 percent loss). Only 23 percent believe the market will finish the year up an additional 5 percent or more.

What’s everybody’s favorite sector over the next six months? Technology. With 17.5 percent of the vote, technology is well above the next most popular, energy, with 14.2 percent. Do investors think that Apple AAPL is set for a big run to the upside that will take other tech names with it?

The least favorite sector is utilities with 16.8 percent professing to be utilities bears. The next highest was materials at 11.9 percent.

How will the U.S. stock market perform versus the rest of the world? Nearly 58.5 percent of respondents said that it will outperform other world markets.

Outside of stocks, the survey found that 70.6 percent of respondents believe the 10-year treasury yield is going higher. Gold is going higher too, if 59.2 percent of surveyed investors are correct. Oil, however, is heading down according to 55.9 percent.

Finally, 20.1 percent of respondents said that their portfolio is 60 percent exposed to equities. 48.4 percent are between 50 and 70 percent exposed.

What does all of this mean? It means that as of now, investors aren’t all-in despite the record highs on the major indices. And just as the financial media has reported, investors don’t believe that this bull has a lot of run left before a correction occurs.

How big? CNBC reports that Piper Jaffray analysts Craig Johnson and Leah Williams see a correction of up to 10 percent.

Others, like Jeremy Seigel in a CNBC interview, says that as long as everybody is afraid of the pullback, a technical correction isn’t likely to occur, unless the Fed starts talking about taking away stimulus measures.

The survey had a small sampling but had similar findings to others gauging market sentiment. Whether or not data like this are useful is subject to debate but what is clear is that the market is not full of bull market euphoria.