Investors just raised the most cash since the March 2020 pandemic panic

The “frothy bull” sentiment among investors has fizzled as the Iran war and mounting private credit concerns prompt investors to aggressively raise cash, according to Bank of America.

The bank’s monthly fund manager survey showed a jump in cash levels to 4.3% in March from 3.4% the prior month (and a record low of 3.2% in the first month of 2026). That’s the biggest retreat from the market since March 2020, when a Covid-induced market panic set in.

Likewise, Deutsche Bank says that those who can choose to sell have done so.

“Discretionary investor positioning is notably underweight and at a four-month low,” strategists led by Parag Thatte wrote in a Friday note.

Add those two tidbits to the recent report from JPMorgan on the first “persistent signs of weakness” in retail traders’ appetite for equities this year.

Near the start of 2026, retail traders were pouring the most money into the stock market since the sharp rebound in April 2025, while Goldman Sachs touted the third-largest shift into stocks and out of cash since at least 2008. Though sentiment and positioning have seemingly shifted materially, the S&P 500 is still less than 5% from its late January record closing high.

The simple answer is that these shifts, while substantial, still aren’t sufficient to signal any meaningful pricing of recession risk.

“BofA positioning metrics far from uber-bear levels seen at recent big lows/good entry points for stocks & credit,” wrote Chief Investment Strategist Michael Hartnett. “No one pricing in recession… probability of hard landing just 5% (vs. 46% no landing, 44% soft landing).”