Appetite for risk has increased among money managers to a new high, according to the latest fund manager survey by Bank of America Merrill Lynch (BoAML).
A total of 16 percent of investors said they are taking above normal levels of risk when choosing where to put their money, even though 48 percent of respondents said that equities were overvalued.
"Icarus is flying ever closer to the sun and investors' risk-taking has hit an all-time high," Michael Hartnett, chief investment strategist at BoAML, said in a statement Tuesday, borrowing a phrase from Greek mythology.
"A record high percentage of investors say equities are overvalued yet cash levels are simultaneously falling, an indicator of irrational exuberance," he added.
This means that though investors think that stocks are too expensive, they are still pushing money into those equities, which indicates that they think markets will continue to rise despite these lofty valuations.