Despite gains in the stock market, a majority of U.S. investors are going to invest more conservatively or make no changes in their investment strategy this year, according to a new study by Franklin Templeton released Wednesday.

The conservative attitude may be prompted in part by the fact that nearly a third (31 percent) of the U.S. respondents thought the stock market was flat or down last year when in fact the S&P 500 was up 16 percent.

Franklin Templeton's "2013 Global Investor Sentiment Survey" included responses from 501 investors in the United States.

The stock market has been up for four consecutive years. However, 69 percent of the respondents said they would be more conservative or make no changes. This is despite the fact that 65 percent of the respondents said they thought the market would be up this year.

“A lingering bias towards risk avoidance continues to impact their willingness to invest more aggressively,” Franklin Templeton says.

“Despite investors’ overall positive outlook, it appears that avoiding loss rather than achieving higher returns is still a top priority,” says Greg Johnson, president and chief executive officer of Franklin Templeton Investments. “Working with a financial advisor can be the best resource for evaluating all sides of the risk equation.”

Respondents hold contradictory views about the market. Although a majority felt the market will be up this year, another 43 percent said they are skeptical or pessimistic about the U.S. markets. Investors cited concerns about government fiscal policy and the global economy as the most common reasons for their reluctance to invest this year.

“Trying to avoid short-term risk and volatility entirely may expose investors to other kinds of risks, such as inflation and the impact of rising interest rates. These longer-term risks can negatively impact investors’ ability to meet their financial goals,” says Wylie Tollette, director of performance analysis and investment risk for Franklin Templeton Investments. 

Thirty seven percent of those surveyed thought they could meet their long-term investment goals without investing in stocks, the survey says. At the same time, 69 percent expect equities to be among those securities offering the highest returns over the coming decade and 81 percent are optimistic that they’ll reach their long-term goals. Sixty percent noted that their primary investment goal is retirement.

Surprisingly, 57 percent of younger investors do not see stocks as essential to meeting their long-term investment goals. Those aged 25 to 34 have a 14 percent smaller allocation to stocks than their older counterparts.

Although investors outside the United States identified Asia as the region most likely to provide superior returns, U.S. investors are bullish on domestic investments. Over half (54 percent) think the U.S. will offer the best investment opportunities. On average, 78 percent of U.S. investors' portfolios go to domestic investments and 39 percent of respondents said all of their investments are in the U.S.

Eighty-seven percent said they plan to keep at least half their investments at home over the next decade, mostly because they perceive foreign markets as being riskier or they do not know enough about them.

“Investors keeping all of their investments stateside are automatically excluding well over half the world’s investment opportunities,” says David McSpadden, senior vice president of Franklin Templeton Global Marketing Services. “Engaging with a financial advisor can help interested but uncertain investors find international investments that are suited to their goals.”