Bank of America's August 2025 Global Fund Manager Survey reveals that investor sentiment is at its highest level since February 2025, with cash holdings dropping to a historically low 3.9% of assets under management and equity allocations rising. Despite this bullish stance, a record 91% of surveyed fund managers believe that U.S. stocks are overvalued, marking the highest level of concern in data going back decades. Approximately 41% of fund managers, overseeing $413 billion in assets, consider the U.S. stock market to be in a bubble, an increase from 37% in July. The survey also highlights that 70% of investors expect stagflation—characterized by high inflation and low growth—over the next year. Additionally, 48% of investors hold gold exposure, and emerging-market equities are viewed as the most undervalued. Bank of America analysts note that the S&P 500's forward price-to-earnings ratio stands at 22.5 times, placing it in the 95th percentile since 1988, while its price-to-book valuation has surpassed the peak reached during the dot-com bubble in March 2000, currently at 5.3 compared to the previous high of 5.1. This elevated valuation level has drawn attention from market strategists, with some cautioning about potential risks despite the ongoing rally in U.S. equities.