Investor optimism rose in the fourth quarter but remains far below levels earlier this year before the pandemic struck, the latest Gallup poll information found.

Other revelations the the data include optimism about unemployment remains down sharply from its 2020 peak and fewer investors are sure about meeting their 12-month investment targets.

The Wells Fargo/Gallup Investor and Retirement Optimism Index stands at +42 in the fourth quarter. This is up from +18 in the third quarter and +4 in the second. Still, investor confidence remains well below the +138 recorded in the first quarter of the year, before the coronavirus pandemic forced unprecedented economic shutdowns.

The latest results are from a Nov. 9-15 survey with 1,709 U.S. investors. Investors are defined for this survey as U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside a retirement savings account.

Unlike the strong rebound in the stock market since the significant market drop earlier this year, U.S. investor optimism has improved incrementally each quarter and is far from recovered from the pandemic shock.

Investors remain broadly confident in the stock market as a place to invest, but as long as the pandemic stifles employment, they may continue to harbor concerns about economic growth and the outlook for sustained stock market gains.

Meanwhile, optimistic about a return to economic growth, fund managers have been slashing their cash positions and embracing risk assets to an extent that’s raising red flags for strategists at Bank of America Corp.

Money managers overseeing $534 billion in total are underweight cash for the first time since May 2013, with levels down to 4%, according to a BofA survey that took place Dec. 4 through Dec. 10, Bloomberg reported

Investors are the most bullish on stocks and commodities -- the so-called “risk-on” assets -- since February 2011, while the Bitcoin rose in the list of the most crowded trades, according to BofA. The plunge in cash exposure is setting off the broker’s sell signal for equities.

“Investor sentiment is bullish as vaccine hopes induce strong ‘buy the reopening’ trade,” said BofA strategists led by Michael Hartnett in a note. “We say sell the vaccine in the first quarter 2021.”

• Tom Lee: Robust 2021 Market Despite 10% Correction
• Alarm Bells for Stock Bulls, Bears Signal Volatile Year-End