Daniel Moskowitz, president of Chatham Wealth Management, says his firm has run up against plenty of clients who are still scared of the stock market.

But he and his colleagues have been able to successfully lure clients off the sidelines. The reassuring message: A balanced portfolio combining short-duration bonds and blue-chip stocks with high dividends is “the safest way for them to meet their income needs.”

If all advisers were as persuasive as Moskowitz, they might be swimming in new assets: Americans have a record $5.9 trillion in liquid deposits in domestic accounts, notes Dan Geller, executive vice president of Market Rates Insight, in San Anselmo, Calif.

The reason, argues Geller, is that they just don’t trust the recovery. 

It’s true that consumer confidence indexes show modest improvements since the end of the recession, but it’s what consumers are doing with their money that counts, he says.

Americans appear hesitant to tie their money up, even though inflation is easily outstripping the paltry interest rates paid by their liquid accounts.

Both the Consumer Confidence Index, by the Conference Board, and the Consumer Sentiment Index, by the University of Michigan, are subjective, says Geller: They use questionnaires to measure how consumers feel about the economy. A more objective measurement is what they ultimately do with their money, he says.

The reassuring investment pitch from Chatham Wealth Management, in Chatham, N.J., has helped the firm add $15 million in new assets since August of last year.

But some advisers fear that market-phobic investors have waited too long to jump back in. “The fact that so much money is sitting on the sidelines doesn't concern me as much as what happens to it next,” says Jonathan Bergman, a financial planner with Palisades Hudson asset Management, in Scarsdale, N.Y. “My concern is that investors on the sidelines redeploy now and the market doesn't meet their expectations.”

Bergman adds he’s not calling a top to the market, says he doesn’t expect returns in the next couple of years that will match those of 2009 and 2010.

Yet he adds that even now, the best way to grow long-term capital and beat inflation is to invest in a diversified securities portfolio. “As long as investors have a long-term view and won't bail on stocks during a volatile time, then they should invest in stocks,” Bergman says.

If stocks are risky, liquid accounts are a sure loser right now, notes Geller. Money sitting idle in liquid accounts, such as checking, savings and money market accounts is earning an average of 44 basis points of interest. By comparison, the annual inflation rate in February 2011 was 2.1 percent.

Much of the money parked in liquid accounts has shifted there from CDs and other term accounts, says Geller. From March of 2009 to March of 2011, nearly 13% of total deposits shifted from term accounts to checking, savings and money market accounts.

In March of 2009, during the recession, liquid-account balances made up 62.2% of total deposits.  By March of 2011, liquid accounts balances, as percentage of total balances, reached a new record of 75%, according to Geller.