Recent, surprisingly positive signs for the economy and the markets are on the rise-indicating that investors might return to equities and equity funds in 2011.

But don't break out the champagne just yet. Those investors probably are not coming back in droves, and fund managers shouldn't boost investors' performance expectations.

The Bureau of Economic Analysis revised its estimate of economic growth for the third quarter upward to 2.5%, from its initial 2.0% estimate four weeks ago. While it isn't a robust figure, it is the first time in several quarters the government increased its GDP outlook from its initial estimate.

In the last week of November, weekly jobless claims fell to their lowest level in two years, and in October, personal incomes posted a strong gain.

Trading experts are also now saying that the bond market is stumbling, which will force investors to come back into stocks. Indeed, in the past two weeks, investors redeemed money from bond funds for the first time in nearly two years.

Then, during the trading session on Dec. 7, the Dow Jones Industrial Average came close to its September 2008 highs.

While there is no guarantee that the market will remain at this level, said Bruce McCain, chief investment strategist at Key Private Bank, investors appear willing to return to equities.

Likewise, Brian Gendreau, market strategist with financial advisory firm Financial Network, said: "There's a growing recognition that the economy may not be in anywhere as bad shape as people thought. We were talking about a double dip just two months ago when the news was mixed, but now the news isn't even mixed, and the market is pricing that in accordingly."

Nonetheless, affluent investors with a net worth of $100,000 to $1 million are still overwhelmingly risk-averse, with 40% saying they are likely to invest in cash over the next 12 months, and only 23% planning to buy equities, according to a survey by Spectrem Group released last week.

George H. Walper, Jr., Spectrem Group president, put it best: "Although the economy has been recovering for some time now, the nation's mass affluent have not shaken off their recession-driven caution when it comes to investment decisions. Rather than return to equities or even bonds, this large and important group favors cash, reflecting real concerns about the ability protect their principal from further risk."

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