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Wealthy Are Optimistic, Like U.S. Stocks Right Now

NEW YORK (TheStreet) -- For the 88 million U.S. workers identified by the American Benefits Council as having a 401(k) plan, making investment choices isn't easy.

So why not turn to a demographic that has demonstrated it knows how to make money in the financial markets and see what they think about investing, money and the economy?

Legg Mason surveyed 500 affluent U.S. investors last week and found a generally sunny outlook, with 86% of respondents saying they are "optimistic" about their investment portfolios and 74% saying the stock market is the best place to build wealth over the next year.

Here's how the wealthy rank the top-performing financial markets right now: U.S. stocks (74%); international stocks (53%); real estate (53%); gold/metals (33%); U.S. bonds (31%); cash (28%); alternative investments (24%); and global bonds (19%).

For 401(k) investors, where the wealthy prioritize their investment savings is what really counts. Legg Mason reports the following asset allocation breakdown among affluent Americans: stocks (41%); cash (22%); fixed-income (20%); real estate (6%); alternatives (4%); and other (7%).

Both rankings show wealthy Americans growing bullish on stocks.

"There is a promising amount of optimism among U.S. investors, and much of it is focusing on U.S. equities," says Matthew Schiffman, a managing director at Legg Mason. "This is consistent with our global research conclusions and bodes very well for the U.S. equity markets should investor optimism ring true."

Surprisingly, cash remains a strong option, even as banks continue to offer paltry return rates on savings vehicles such as certificates of deposit and money market accounts.

For example, BankingMyWay.com reported an average rate of return on one-year CDs at a weak 0.196%. Money market returns are worse, at 0.095%.

There are several additional areas of concern for the affluent investment class.

Weak economic growth was cited by 44% of survey respondents as a huge threat to prosperity, while 36% cite inflation and 34% say low interest rates on bank savings vehicles are a challenge. An "increased tax burden" was cited by 31% of survey participants.

For 401(k) investors looking for clues from the financial market, the Legg Mason study reveals some insight on how the wealthy view the markets and investing.

Of course, the rich likely have a wider margin of error than mainstream Americans, but knowing where their money is going is still a useful road map for the middle class.</p.

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