Why do we care how the affluent invest? Because there are 26 million such households in the country, and without them, it’s hard to see any fundamental turnaround in the economy or U.S. financial markets.

A new study shows that affluent investors have all but given up on stocks. For them, 2011 is all about cash. A full 40% of investors with between $100,000 and $1 million in investible assets say they are likely to put their money into cash over the next 12 months, according to the study from Spectrem Group. That’s nearly twice the number who say they plan to invest in equities.Only 17% of the group plans to buy fixed-income products, 12% plan to put money overseas and 6% plan to buy real-estate. The most obvious reason is that after losing a chunk of their retirement during the crisis, affluent investors aren’t prepared to be burned again.
By Robert Frank, Dec, 8, 2010 WSJ

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