Wall Street firm: Buy when Wall Street is selling

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

One firm believes it's found the secret to making money in stocks year in and year out: buy when its peers on Wall Street say sell.

"The single best way to make money over the last few years has been to trade against the institutional investment community," explained Savita Subramanian, head of U.S. equity and quantitative strategy at BofA Merrill Lynch, during a global research conference for the firm held in New York on Tuesday.

"Of all the attributes we track, ownership may have been the most important over the last year," Subramanian emphasized.

According to her analysis, the best time to buy stocks—both the overall market and individual names—is when Wall Street sentiment is at bearish extremes, such as it is right now.