Risk-taking hit an all-time high of net 16% among global investors in November, according to the latest Bank of America Merrill Lynch fund manager survey.
Investors' average cash balance was decisively lower, falling to 4.4% from 4.7% in the October survey, and taking the fund manager cash rule out of "buy" territory for the first time since October 2013.
The cash rule holds that when average cash balance rises above 4.5%, a contrarian buy signal is generated for equities; when the cash balance falls below 3.5%, a contrarian sell signal is generated.
"Icarus is flying ever closer to the sun, and investors' risk-taking has hit an all-time high," Michael Hartnett, Merrill's chief investment strategist, said in a statement. "A record high percentage of investors say equities are overvalued yet cash levels are simultaneously falling, an indicator of irrational exuberance."
A net 48% of investors surveyed said equities were overvalued.
The poll was conducted in early November among 206 panelists with $610 billion in assets under management.
"Goldilocks" is now fund managers' consensus view for the global economy, with a record high 56% of investors expecting above-trend growth and below-trend inflation, up eight percentage points from October.
At the same time, the below-trend growth and inflation ("secular stagnation") outlook fell nine points from October to 25%, the lowest level since May 2011.
In other notable findings from the November survey, long Nasdaq was considered the most crowded trade for the sixth time this year, cited by 34% of investors, up from 29% in October.
