Investors are not as afraid of keeping their money in the stock market as might be expected, even after last year's disastrous market collapse, says a new survey by Vanguard.

The investment management company surveyed 3,012 investors from 21 years of age to post-retirement age in May and June and found that most still feel investments in equities are necessary in a good portfolio. Nearly 90% say it is particularly important to hold equities in the years immediately before retirement and through retirement.

Six in 10 respondents made no changes in their stock holdings during the market decline, while 21% sold some and 5% sold all of their equity holdings. Even while the market was plunging, 17% actually increased stock exposure.

Among the group that sold all of their equity holdings, most say they plan to resume investing in stocks eventually.

At the same time, the market chaos has made investors adjust their expectations, the survey indicates.  Investors anticipate a median return of 7.5 % now, down from the 10% to 12% long-term average anticipated in the past.

Of the respondents, 73% say they realize the significant risks the stock market can pose. Only 13% feel strongly that their retirement prospects are permanently damaged by the market decline. As logic would indicate, those closest to retirement say they are concerned about having to delay retirement.

"Broadly speaking, the study results suggest that investors continue to believe equities are an important part of their portfolios despite the worst financial crisis in several generations," says John Ameriks, co-author of the study and head of Vanguard Investment Counseling and Research.