Equities should do well over the next five years, but in the short term concerns about the euro zone crisis and Chinese growth are keeping investors cautious, the Credit Suisse investor survey shows.
Some 81 percent of investors forecast equity outperformance over five years, but only 48 percent thought they would do well over the next 12 months, the survey shows.
If a rebound did happen, extremely negative positioning could act in favour of battered stock markets, especially in light of the relative upbeat long term expectations.
"The net long position of hedge funds is below November 2011 lows and insurance/pension fund weightings are at the low end of their range," Credit Suisse notes.
The euro zone crisis was listed by 54 percent as the most significant macro risk, while 24 percent chose China, and 17 percent the U.S. fiscal cliff.
Although equities are generally considered cheap, one in four respondents said valuations were of no importance at the moment given the macro uncertainties.
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