Even though the stock market has gotten off to one of its best starts to a year in decades, Wall Street strategists aren't buying into the hype. Bloomberg surveys strategists on a weekly basis, and along with asking them for their year-end S&P 500 price targets, they also ask for their recommended portfolio weightings into stocks, bonds and cash. As of last week, the consensus recommended stock weighting stood at 57%.
To put the current 57% recommended weighting into context, below is a historical chart of the reading going back to 1997. As shown, while stocks are up big in 2012, strategists have actually cut their recommended equity weighting this year.
If strategists as a whole were particularly prescient, this would be a bearish sign, but fortunately that's not the case. The peak recommended stock weighting came just after the peak of the Internet bubble in early 2001, while the lowest recommended weighting came just after the lows of the financial crisis.