Many investors still carry emotional scars from 2008.

UBS Wealth Management Americas’ latest investor survey finds that the current market mayhem reminds investors of what happened about eight years ago.

Of those polled, 42% say the volatility has “rekindled memories of the financial crisis,” according to UBS. Plus, nearly 25% believe it is signaling “the start of a longer-term market decline,” the bank explains.

UBS released the report, “The Conflicted Investor,” on Thursday, two days after it reported its fourth-quarter and full-year 2015 earnings. “The findings reveal a struggle between investors’ rational perspective and the emotional impact of the financial crisis,” according to a statement.

“On one hand, investors believe in the economic recovery — 79% say it has met or exceeded their expectations — and nearly half, 47%, wish they had invested more during the rebound. On the other hand, many investors still carry emotional scars from 2008 that have kept them from fully participating in the recovery.”

How many have turned to cash? Plenty.

The poll of more than 2,600 high-net-worth and affluent investors finds that close to 90% have kept or increased their cash holdings since the crisis, and fewer than 20% are willing to assume more risk for greater returns.

“Even before recent volatility tested their resolve, investors struggled to weigh the economic recovery and its positive effects on their finances against the lingering emotional fallout from 2008 and 2009,” explained Paula Polito, client strategy officer of UBS Wealth Management Americas, in a statement. “The financial crisis appears to have cast a long shadow on investors.”

Still, the survey finds that having an advisor makes a difference.

Almost all investors with a financial plans are more confident than their peers during times of market volatility: 98% say their plans “keep them on track,” while 97% state that their plans “help them stay focused on long-term goals, not daily market fluctuations.”

Future Focus

When asked how long the present volatility might last, slightly more than three-quarters, 77%, believe this trend is temporary. But nearly a quarter, 23%, state that it is a sign the U.S. is “on the verge of a longer-term market decline.”

What’s going on?

Most wealthy investors, 85%, say the volatility is driven by “so many factors it is too difficult to predict where markets are headed,” according to UBS.

Over three-quarters (76%) view the multiple global issues affecting that markets as a challenge to their understanding of the broader financial picture. Even more, 81%, say global terrorism is part of the “new normal”; 80% worry about the results of the 2016 U.S. presidential election; and 76% are concerned about the size of the country’s debt load.

While wealthy investors keep an average of about 20% of their investable assets in cash, more than half believe having “too much” cash is unwise. Many say they are likely to invest a quarter of their cash when they find the right investment opportunity, and fewer than 15% say they would advise the next generation to maintain a large cash allocation. 

Nonetheless, almost nine out of 10, 89%, have kept or boosted their cash holdings since the financial crisis, and some 40% think investors can never hold “too much” cash. “Seven years after the financial crisis and the bull market that followed, only 33% see market declines as opportunities to invest,” explained UBS. 

Millennial Madness

The UBS investor poll found that millennials seem more likely to regret their sales of investments during market declines than other demographic groups: 52% vs. 23% of Gen X and 14% of Baby Boomers. They also wished they had invested more during periods of financial recovery periods: 68% vs. 52% of Gen X and 44% of Baby Boomers.

“Millennials are arguably more conflicted than other generations when it comes to how they view investing,” explained Sameer Aurora, head of client strategy for UBS Wealth Management Americas, in a press release. “Almost half say they would take on more risk now, but they’re holding twice as much cash as Baby Boomers. Also, Millennials are unhappiest with how their portfolios are positioned, but they are the least likely to do anything about it.”

Millennials seemed to have learned different lessons from the financial crisis than investors of other generations. Only one-third of millennials now conclude that “buy and hold” investing is important vs. 57% of wealthy Swing/World War II investors.

In addition, 27% of millennials say market timing is “the most valuable lesson they learned,” says UBS, vs. 10% of Baby Boomers.

The recent poll of investors also reveals that many millennials, 43%, are willing to take on more risk since 2008—double the level of Gen Xers, 21%, more than three times that of Baby Boomers, 12%, and nearly five times more than Swing/WWII, 9%.

But, on the other hand, when asked about cash, millennials hold the most of this asset class: 41% vs. 28% for Gen Xers, 20% for Baby Boomers and 19% for the Swing/WWII generations.

Millennials, however, are the least happy with how they have positioned their portfolios: 15% vs.32% of Gen Xers, 50% of Baby Boomers and 56% of the Swing/WWII generations.

— Check out 5 Reasons Not to Panic Over the Markets on ThinkAdvisor.