Of the 85 investment managers Russell surveyed - 85% of them expected the market to rise in '07. And 31% believe it will rise by 10%.
For the last 2 years, the survey painted investors as "cautiously bullish," according to Lert. But with the market showing such strength these last few months, that guarded optimism may turn into an all-out bull run:
"A little momentum always helps people generate conviction in their beliefs," says Lert.
The most attractive sectors for money managers going into '07: technology, healthcare and financial services. And the least attractive? Real estate and corporate and high-yield bonds.
The survey also shows more interest in investments overseas - both in emerging markets and non-U.S. developed markets. Lert says a reason for this is the weakness in the U.S. dollar. With a global economy in relatively good shape, the drop in the value of the dollar accelerates returns for overseas investments.
Lert says the survey isn't necessarily a bellwether for the coming year - but generally reflects investment managers' preference for stocks over bonds. But if the survey is any indicator - money managers could be in for another very good year.