"Going back to March of 09, pretty harsh terms come to mind: panic, terror, fear, all of the above," says Mark Balasa co-CEO of Balasa, Dinverno, Foltz LLC. of Itasca Ill. "A lot of people were asking the question, ‘Are we going to fall off the cliff? Is it over? Are we ever going to recover from this?'"

Of the firm's 750 clients, Balasa says only four or five reached their breaking point and sold their assets. The rest, he happily reports, stayed the course and have since recovered essentially all of their losses. But even with that recovery, Balasa says his clients remain unsettled. The biggest difference between then and now is that the cause of their anxiety has shifted from Wall Street to Washington.

"Rising taxes and spending cuts and deficit spending and borrowing are what most people are coming in asking about and worrying about, and there are no easy answers for that," he says.

Beyond that, the question of whether geopolitics and other factors trump economics is currently being asked on a global basis, as unrest in the Middle East, spiking oil prices and the recent tragedy in Japan have many investors bracing for the possibility of a drastic market drop.

But Balasa says the past two years have helped stem any real apprehension his clients would have felt toward the current market volatility. Going forward, he says his clients feel secure over the next two to three years, but adds they are more concerned about matters playing out in Washington that could potentially impact the next five to seven years.

Confidence

Annika Ferris, a wealth advisor at Brightworth in Atlanta, also notes the shift in attitude her clients have gone through during the past two years.

"[In 2009] people were afraid they were going to lose everything," she says. "A lot of what the media was feeding to people was exactly that, [that] times have changed, this is different and the world was ending so to speak."

Ferris says clients who had the most trouble during the downturn were those who didn't have enough liquid assets to rely on and were forced to sell their long-term growth assets when the market was down. She notes that Brightworth spent a lot of energy educating their clients about the importance of properly structuring their portfolios, and adds that confidence was high among investors who kept their seat belts fastened and weathered the storm.

"Most of our clients have confidence in their investment strategy, and they have that because it was validated during the downturn two years ago," Ferris says.

As a result, she says they're not riled by the recent political and economic turmoil. They also realize that short-term volatility isn't a problem for their long-term growth strategies as long as they maintain the proper amount of liquidity.

Still Fragile

But not all investors came out of the past two years stronger. Some still bear the scars from 2009. "I think people are just fragile from it," says Cheryl Holland, president of Columbia, S.C.-based Abacus Planning Group.

Particularly vulnerable, she says, were people going through a major life transition such as a divorce or retirement, or even empty nesters.

"It wasn't just about the stock market declining, but also what that meant as far as consumer confidence and people getting laid off from jobs," Holland says. "If you yourself were secure you worried about your childrens' jobs; [there were] just a whole host of concerns and worries."

Holland says she spent a lot of time checking in with her clients to reassure them they were still on track. Fortunately, she says, she was able to calm their nerves.

"I think people still look to their advisor for that peace of mind and that sense of hope when they need it," she says.