Despite these small gains there are some factors that indicate investors are beginning to move away from the sidelines and towards a more pro-investing strategy. Those investors indicating they are “Not investing” dropped from 22.% down to 15 percent. Among Millionaires, the drop among those who indicate they are “not investing” was even greater, moving from 21.4% to 9.4%. Millionaires also increased in their likelihood to invest in stocks (rose from 28.2% to 35.2%) and stock mutual funds (rose from 33.3% to 41.4%). At the same time, Millionaires also plan to increase their cash and bond investing, reflecting some ongoing market trepidation and concern. Among non-millionaires, the change between those “Not Investing” and the increase in those likely to invest in stock and stock mutual funds was very small.

The over-abundance of optimism and the dramatic correction experienced in the last two months have given way to a more cautious, guarded and wary outlook for the future. This caution remains despite recent gains by the Dow as well as somewhat positive news in the real estate markets.

Investors will continue to remain cautious until they feel not only the stock market but the unemployment rates have stabilized. Yet even these indicators will not be enough. The political climate and increasing deficit have many affluent and millionaire investors nervous about the impact increased taxes will have on them. Having been caught being unprepared just last fall many households are still remaining very cautious about their future investment choices.

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