As stocks continue to scale new heights in an 8-year-old bull market, BlackRock strategists say investors still aren't taking enough risk.
The world's biggest asset manager, handling some $5.4 trillion for clients, dismissed fears that the equity rally is at risk of derailing due to old age and complacency. Instead, its experts believe that many investors continue to miss out on a run that still likely has a few years left.
"We know that many investors have been cautious about investing in risk assets really since the global financial crisis, and recently that caution was ironically exacerbated by a period of low market volatility," Richard Turnill, global chief investment strategist at BlackRock, told journalists at an investment roundtable Tuesday morning.
As volatility has declined, valuations have risen and fears have grown that the post-crisis bull run is near a close.
Turnill said the slow pace of economic gains actually suggest that the recovery has room to run and the timing of the next recession "could be measured in years rather than quarters." Still, he said, investors remain afraid.
"When we look more broadly, we don't see systemic risk," he said. "Potentially, many investors are still not taking enough risk."
His remarks come, however, as investors to appear to be getting more confident and coming in from the sidelines.
Bank of America Merrill Lynch's gauge of where Wall Street managers are positioned indicates that stock allocations and optimism are at their highest levels since 2011. The American Association of Individual Investors' most recent asset allocation survey shows stock allotments for retail investors are at 68.8 percent of portfolios — the highest level since 2005.