As the U.S. stock market hovers near all-time highs, already skittish retirement investors are not exactly planning on adding to their equity exposure at the moment. 

"We are seeing investor optimism decline," said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute (WFC - Get Report) . "It hit the peak for the cycle at the end of 2017. What we're really seeing is that investors are probably under allocated to stocks already."

She said a study Wells Fargo helped produce showed that un-retired investors planning for retirement have an equity allocation of about 44%, fairly low for non-retirees. 

She said most people are not planning to reduce their equity allocation, yet "since the Great Recession, investors have been very reticent to fully invest back in the markets -- it's just a concern that they have had relative to the risk associated with equities, and we would tell those investors that they probably need to take that risk if they're going to grow their assets over a long period of time."

The S&P 500 is up 18% in 2019, extending what has been the longest bull run in U.S. history. Investors may not exactly flood into stocks going forward. 

Meanwhile, McMillion makes the following point, which any investor should consider:

Stocks are risky because they have the highest risk of losing principle, but over a long period of time, stocks are historically the best performing asset class in the world. The risk in not being in stocks is missing out on the best returns out of any asset over that long time frame. Of course, investors closer to retirement will need to de-risk from short to mid-term stock market volatility and pivot into income yielding assets. But investors with many more years before retirement want to achieve the best return possible. 

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