Investors think too highly of America, and Millennials have too much cash, survey finds

Those are some of the findings from a recent online survey of 1,000 investors conducted by asset management firm Legg Mason between late July and late August.

Michael LaBella, head of global equity strategy at QS Investors, a Legg Mason affiliate, said he was surprised that investors remained so optimistic about the US stock market considering that the bull market will hit its 10th anniversary in March. This is one of the longest US bull markets ever, but the rest of the world hasn't performed as well over the past decade.

Still, two-thirds of the respondents indicated that they expected the US stock market to keep rising over the next twelve months, according to the survey. Seventy-three percent of those surveyed said they thought the United States was the best investing opportunity -- despite worries about the trade war with China and rising interest rates.

"Investors are broadly more bullish but they have more exposure to the US than international markets," LaBella said. "There is an opportunity in international markets and people are under allocated there."

In addition to the lack of overseas exposure, LaBella said he was most surprised that younger investors are still so afraid to put money into stocks -- even though the 2008 financial crisis and Great Recession are now 10 years in the rear-view mirror.

Millennials still scarred by 2008

According to the Legg Mason survey, 56% of Millennials indicated that their current investing strategy is influenced by memories of 2008. To that end, Millennials have more money in cash (25.4%) than stocks (17.9%) in their portfolios.

This overly conservative investing philosophy could come back to haunt them, LaBella said.

"Millennials have the luxury of time on their side. They should be taking more risk but they have more money in cash than stocks than baby boomers who are just about to retire," he said.

But LaBella said that the most surprising finding was not one of the 1,000 investors said they owned bitcoin or other similar assets. That may be because the price of bitcoin and other cryptos have plunged in the past few months. But he also thinks it may have something to do with the fact that bitcoin is still viewed as a more speculative, get rich quick trade as opposed to a viable long-term investment.

He pointed out that the survey's participants still had exposure to other assets outside of stocks and cash, such as bonds, gold, real estate and other alternative investments.

"A lot of people talk about bitcoin but it's interesting that not one person in our survey said they actually owned it," LaBella said.