The Big Guys Are Loading Up on Stocks

Institutional investors expect the stock market to climb an additional 6 percent to 7 percent by the end of the year.

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Not to suggest that if everybody's doing it so you should you, but a just-released Citigroup survey reported that almost two-thirds of institutional investors said they're looking to add more stocks to their portfolio. That's up 10 percentage points from Citi's December survey.

According to Citi, they favor the tech sector and expect utilities to perform worst in 2009 (in December, they expected financials to perform the best and consumer discretionary to perform the worst.) Attitudes about growth stocks have also changed: In mid 2007, 80 percent believed that growth would outperform value, but in December only 40 percent stuck by growth.

Other interesting results:

  • There's been a shift with emerging markets now expected to beat U.S. stock indexes.
  • On average, respondents expect the stock market to climb an additional 6 percent to 7 percent by the end of the year (that's way below Citi's opinion that stocks will rise 15 percent or more.)
  • More than 80 percent think the S&P 500 has already bottomed.
  • The prior survey reflected a large-cap bias, but now investors are split between large cap and small cap stocks.
  • In a separate survey by Merrill Lynch, 26 percent of managers surveyed think the global economy will improve within 12 months.