In a poll of 100 advisors with an average experience of 20 years each, 40% say their clients are more heavily invested in managed accounts than five years ago. Thirty-eight percent say mutual fund wraps have increased in popularity during that time.

"The survey shows asset-based investing is becoming more mainstream for a growing number of investors," says Jack Sharry, president of the Private Client Group of Phoenix Investment Partners of Hartford, Conn., which commissioned the survey. "High-net-worth investors are finding that managed accounts–with their built-in tax efficiencies and portfolio customization–may suit them better than mutual funds."

Hard Assets May Soften Stock Market Blows

Leon Ritchie is hearing a lot these days from people eager to diversify their investments.

But Ritchie isn‚t a financial advisor or money manager. Ritchie is a rare coins dealer, and some of his biggest customers lately, he says, are stockbrokers.

"I‚ve sold more gold coins to stockbrokers over the past nine months than I have over the past 15 years," says Ritchie, head of Monetary Portfolio Consultants in Scottsdale, Ariz.

Although no one is keeping hard statistics, anecdotal and other evidence suggest that some shell-shocked investors may be putting less money into the stock market and more money into so-called hard assets.

One indication: In March, stock mutual funds suffered their largest outflow of the year, declining $20.6 billion, according to the Investment Company Institute.

In recent months, most money yanked from stocks got parked in cash accounts. But in March, money market funds had net inflow of just $13.5 billion–raising questions about whether investors may be repositioning their portfolios away from liquid securities into hard assets.

One appealing feature of hard assets is that they have intrinsic value and will always be worth something. But the primary lure is that hard assets are negatively correlated with the equities and fixed-income markets. Thus, when stocks and bonds fall, the values of hard assets typically rise.

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