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MFS survey: Investors are shifting to cash

Stocks on Wall Street fell this morning, partly on jitters following the recent downgrade of long-term US debt, and one possible reaction could be that more investors — and particularly younger ones — will turn to cash.

A new survey from MFS Investment Management concluded that even weeks before the turmoil of recent days, there were signs that conventional investing wisdom may no longer apply.

“The research shows investors are driven by fear, leading to a strong desire to protect their assets,’’ MFS said. “Nearly three in five investors cite fear (about volatility or needing money someday) as a reason they hold high or increasing levels of cash.’’

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Investors surveyed had on average 26 percent of their in portfolio in cash, and younger investors had a cash position of 30 percent, said MFS, a global money management firm with offices in Boston.

“Investors are in cash for a reason and, regardless of time horizon, conventional investing wisdom no longer applies. The Great Recession of 2008 has had a profound – and longer-lasting – impact on investors’ confidence than expected,’’ said William Finnegan, MFS’s senior managing director of US retail marketing, said in a statement. “Investors, especially younger ones, would rather keep cash in the bank than chance the stock market.’’

Research Collaborative, an independent research firm hired by MFS, conducted the online survey from May 31 to June 7 of 974 individual investors with $100,000 or more in household investable assets, MFS said.

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