Despite investors' enthusiasm over the pro-growth economic policies of President-elect Donald Trump, the average recommended allocation to equities by Wall Street pundits remains well below normal, a contrarian indicator that could pay off for those willing to bet against the crowd, according to Bank of America Merrill Lynch.
The firm's "Sell Side Indicator" predicts a 19 percent increase in the S&P 500 over the next 12 months. In the past 30 years, the signal had a success rate greater than 90 percent, according to the bank.
Equity and quant strategist Savita Subramanian explains how the "Sell Side Indicator" works:
