The Wall Street Journal’s Robert Frank had a story on Monday that may tell us something about the upcoming Fall auction season. High Net Worth Individuals feel burned by equity markets over the last three years. They’re taking refuge in defensive assets that all behave similarly to art:

“Today, my first principle of investing is do no harm, don’t make major mistakes,” said Mr. Mantell, president of New York-based Mantell Advisory LLC. “It’s not about chasing returns anymore. For me, it’s about real diversification and not being so dependent on traditional equities.”

After taking big risks and big losses in 2008, wealthy investors have become the Cassandras of the financial world, hunkering down with cash, gold, farmland and other safe-haven investments. Their “fear portfolios” largely protected them from last week’s market gyrations, when the Standard & Poor’s 500-stock index spiked up and down more than four percent a day for four days straight.

Yet they are also imposing a national price. Recoveries are often led by the investing and risk-taking of the wealthy, and the rich have traditionally been more optimistic about the economy than everyday investors. Yet current surveys show the rich are among the most pessimistic about the economy. Rather than investing in stocks or companies that can create jobs, they are betting on continued volatility and slow growth by hoarding cash, gold and other defensive assets.

“If the wealthy run into the proverbial bunker, then the economy will falter,” said Mark Zandi, chief economist at Moody’s Analytics, a division of Moody’s Corp. “A loss of faith in our economy can quickly become self-reinforcing and self-fulfilling.”

Once Bit, Rich Shy from Risk of Stocks (Wall Street Journal)