Scott Olson/Getty Images Bank of America Merrill Lynch's fund-manager survey shows that a record number of participants are taking on higher-than-normal levels of risk. A large number of investors acknowledge that markets are overvalued, while cash levels are still falling, which signals overconfidence. In markets, it's common knowledge that when things are going well, overconfidence can come back and bite you. And that, in turn, poses one of the great existential dilemmas of investing: Do you take a more measured approach, knowing that your hubris could eventually be your undoing?