Affluent investors are very much in tune with the state of the nation and, except for some attractive stock valuations, they don’t like what they see. That was the main finding of a survey that Fidelity Investments took of 3,000 affluent investors, polling them in person or via a webinar at an Inside/Out Roundtable at 85 Fidelity Investor Centers nationwide.

Eighty percent expect market volatility will be the norm for the extended future, and 64% think a double-dip recession is already here or very likely.

Nearly two-thirds, 65%, expect the S&P 500 is going to end the year flat or down, and the same number believe the European debt crisis will impact the U.S. stock market for at least a year.

Sixty-one percent think profitable companies should put their money to work for capital improvements or new hires, and 73% agree that a large drop in unemployment is critical to an economic recovery. Conversely, 21% think profitable companies should use their cash for dividends, and 18% think they should hold it in reserve.

Thirty-nine percent of affluent investors are concerned about income tax increases, and 28% are worried about capital gains tax increases.

“The European debt crisis, recession fears and potential tax increases have stopped many U.S. investors in their tracks, and they are looking for ways to re-engage with an investment strategy that fits their risk tolerance and helps them achieve their financial goals,” said John Sweeney, executive vice president at Fidelity. “In talking with these affluent investors, they are looking for sound investment guidance about their portfolios, so they can weather the daily fluctuations.”

Despite their gloomy outlook, 67% of the affluent investors said they see long-term or short term (21%) buying opportunities in the stock market.

-- This article first appeared on Money Management Executive.



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