Bank of America's August 2025 Global Fund Manager Survey reveals that investor sentiment is the most bullish since February 2025, with cash holdings dropping to a historically low 3.9% of assets under management and equity allocations rising to levels not seen since before the 2008 financial crisis. Despite this optimism, a record 91% of fund managers believe U.S. stocks are overvalued, marking the highest level of concern since data collection began. Approximately 70% of investors expect global stagflation—characterized by high inflation and weak growth—over the next year. The survey also highlights that nearly half of the investors view emerging-market equities as undervalued. Institutional investors' equity allocation reached about 55%, the highest since the Great Financial Crisis and comparable only to levels seen during the 2000 Dot-Com Bubble. The Shiller price-to-earnings ratio on the S&P 500 hit 38.7 times, the highest since the Dot-Com Bubble burst, significantly above the long-term average of 17.6 times. Additionally, 41% of surveyed fund managers, representing $413 billion in assets under management, consider the U.S. stock market to be in a bubble, up from 37% in July. Retail investors now account for over 20% of options market activity, the highest share on record and surpassing the peak seen during the 2021 meme stock frenzy. The survey also notes that the "Magnificent 7" stocks remain the most crowded trade, with 45% of investors holding positions in these names. While the probability of a hard economic landing is viewed as low, concerns persist around risks such as trade wars and inflation potentially limiting interest rate cuts. Overall, the survey reflects a complex market environment where bullish positioning coexists with widespread caution about valuation and economic outlook.