BMO investors bet on stocks, keep eye on consumers

* BMO investment team overweight in equities

* Says best bet is that recovery is sustainable

* Big risk is a new crisis of consumer confidence

By Andrea Hopkins

TORONTO, Nov 4 (Reuters) - Top investment strategists at Canada's fourth-largest bank said on Wednesday they are betting on gains in the stock market and believe the economic recovery is sustainable -- provided consumers don't have another crisis of confidence.

Paul Taylor, chief investment officer at Bank of Montreal's (BMO.TO: Quote, Profile, Research) BMO Harris private banking division, said BMO's huge investment portfolio is overweight in equities and still adding to that position, believing that stocks will rise amid economic recovery.

In setting out four possible scenarios for the economy over the next 12 months, Taylor said the most likely outcome is that the recovery will be sustained. But the second-most likely scenario is that confidence will evaporate, and the economy will fall into a double-dip recession.

"We do believe that policy-makers have taken the right course of action; we believe that a sustainable economic recovery is the odds-on bet," Taylor told reporters during a conference call.

"But we need to be mindful of the potential that this fragile recovery that is based on this illusory emotion of confidence could in fact ... disappear overnight if we're not careful."