Too early to call bull market over

"Cautious optimism," is how the team at Citi describes investor sentiment right now, and the broker sees "few signs of irrational exuberance". Despite equity markets sitting near record highs, investors' allocation to shares is not and Citi still thinks equities can rally and bond yields fall to end-2015.

"Investor sentiment might feel uncomfortably bullish and positioning seemingly all one-way, but we see few signs of exuberance," writes Citi in its regular House Views note. "Maybe due to scar tissue incurred in 2008/9, but our sense is that many investors remain intrinsically cautious."

"We remain constructive on global equities. We think the bull market is maturing but it is too early to call its end given where we are in the profits cycle."

It's true, individual US investors have been more susceptible to building up big positions in equities, but while institutional investors appear largely overweight equities, they do seem to be "exercising restraint".

"Mass central bank easing without a growth shock - as we have just seen - can be good news for equities and bonds. It boosts earnings prospects whilst keeping short rates well anchored. Such an environment is reminiscent of early phases of the business cycle - which tend to be helpful for risk appetite."

But this view is not held by all. Indeed, in an article titled “Goldilocks at risk from the bears”, our resident stockpicker Edmond Jackson has just advised investors to “mind the risks lurking which could strike at this consensus”.

Another Interactive Investor contributor, Lance Roberts at STA Wealth Management, regularly reminds us to watch out for the warnings signs. "The 'lack of fear,' from a contrarian standpoint, is 'something to fear' in and of itself," he wrote this week.

"Importantly, the markets have now become overbought again without the markets making new highs" said Lance. "While it is too early to call as of yet, these are classic signs of a market that is in a topping process.

"However, despite the volatility and market rhetoric, the trend of the market remains intact and currently suggests that portfolios remain fully invested at target weights at the current time."