"Icarus is flying ever closer to the sun", Bank of America-Merrill Lynch's chief investment strategist said, pointing to signs of "irrational exuberance" among investors in the investment bank's latest global survey of fund managers.
Indeed, according to the latest FMS average cash balances fell from 4.7% in October to 4.4% in November - their lowest level since October 2013 - as asset managers chased markets higher. Even after a $5 trillion gain in USA stocks over the past year, a net 49 percent said they are overweight, the highest level since April 2015.
Meanwhile, the net proportion of investors who were taking out protection against the risk of a "correction" in stocks was at -37%, yet a record high net 48% said equities had become "overvalued". "A record high percentage of investors say equities are overvalued yet cash levels are simultaneously falling, an indicator of irrational exuberance", said Michael Hartnett.
In particular, the impact of the Fed's $4.5trn balance sheet reduction and European Central Bank halving its monthly bond purchases from €60bn to €30bn-a-month divided investors with 42% expecting lower stock prices and 35% predicting stocks to go higher.
Meanwhile, pessimism towards the United Kingdom continued to rise, with a net 37% underweight marking a return to the lows last seen during the global financial crisis.
The other headwinds which investors pointed to was a crash in global bond markets and a flash crash caused by "market structure", which 22% and 13% of investors saw as the two biggest risks respectively.
Ronan Carr, European equity strategist at BoAML, commented: "UK sentiment is severely depressed and remains the least popular country market for European investors".