(FORTUNE Magazine) – SO A YEAR or so ago you had $10,000, $50,000, or $200,000 tied up in the stock market. But the dismal events of October 1987, and merciless volatility since then, have inspired you to sock your money away in something nice and safe, like bank certificates of deposit or short-term T-bills. If so, you're a typical individual investor. Albert E. Sindlinger, a consultant and market forecaster in Media, Pennsylvania, who has been keeping records of people's stock-buying habits since 1948, observes that individuals have never in recent memory been so disgusted with equities. In late summer fewer than 5% of the investors he surveyed planned to buy stocks within the next month -- down from 16.2% in the aftermath of last autumn's crash. Only about 25% of all U.S. households now include at least one shareholder, Sindlinger says. In the past the proportion rarely slipped below one-third. Ah, but perhaps, you may think, if your portfolio were worth $1 million, or $50 million, or $100 million, the Dow's recent up-and-down antics wouldn't ruffle you so much. You could afford a little more short-term risk. You'd still be playing the market. Not necessarily. Fortune's conversations with 15 top money managers for high-net-worth investors reveals that these so-called substantial individuals -- people with portfolios ranging in value from $500,000 to $50 million and above -- are just as nervous about stocks as the little guy, or even more so. Program trading by gargantuan institutions and the price swings that result have made navigating the market a bit like trying to paddle a canoe in a harbor full of supertankers. Up against institutions trading tens of millions of shares in a single day, even the wealthiest individuals have gotten swamped. Increasingly, these investors have headed for dry land in the form of cash, bonds, and CDs. They have also been attracted to stock markets overseas and to dabbling in foreign currencies. In some parts of the country, a fabulous house is the best investment going. Museum-quality paintings -- especially modern and impressionist works -- are popular, as are investment-grade diamonds. William J. Constantine, a managing director at the investment counseling firm of Scudder Stevens & Clark in New York, is part of a 100-person staff that oversees some $8 billion in individual accounts. His strategy reflects the current trend in upscale money management: ''Our typical wealthy client, with investments worth $2 million to $5 million, went into the crash with a portfolio that was about 55% stocks,'' Constantine says. ''And that was already down from 80% to 85% earlier in the year. Now that person's portfolio is less than 50% stocks, and it's going lower. We're shifting from stocks to cash and bonds. Really, high-net-worth people aren't doing anything all that unusual or sophisticated. There is a return to the fundamentals. People who want stocks at all are insisting on long-term quality growth situations.'' A strict policy against betraying confidences constrains Scudder and other big-league money managers from naming clients or revealing too many specifics about where their money is. Still, observes Jerard K. Hartman, another Scudder managing director, ''we do have a number of new clients who are successful entrepreneurs. They've been risk takers all their lives. But now that they have it, they want to hold on to it. A lot of new money comes in wanting all bonds. We have at least one client with a $100 million portfolio, and it's all in short- to medium-term bonds. No stocks. That approach is the epitome of conservatism.'' Irving Trust Co. in New York also numbers several highflying entrepreneurs among its 650 individual investment accounts (minimum portfolio: $400,000). Out of $1 billion in individuals' assets under the firm's management, vice president Stuart Chakrin estimates, fully 60% is snugly tucked away in fixed- income securities. OTHER well-heeled investors are cautious because of their sense of deja vu. Thomas Keresey is a former director of Kidder Peabody who spent 15 years on Wall Street before flying south to Florida, where he now runs several dozen gilt-edged individual accounts for Palm Beach Capital Management Ltd. ''My clients are less interested in stocks than they were a year or so ago, sure. But even then, they were mostly in blue chips with good dividends,'' Keresey notes. Now his clients' portfolios are about 60% to 65% bonds, with another 35% to 40% in cash. One explanation for so conservative an approach: ''My average client remembers the Crash of 1929. He was there. So last October scared him pretty badly.'' In Atlanta, William Astrop, who heads Astrop Advisory Corp., prescribes cash, intermediate-term Treasuries, and low-beta stocks with solid dividends to calm his clients' jitters. ''For accounts from $100,000 to $1 million, we've also started using no-load mutual funds, which we never did before,'' says Astrop. ''It's less risky than betting on individual stocks.'' He likes Neuberger Berman's MANHATTAN FUND and PARTNERS FUND; a growth fund offered by Weiss Peck & Greer called TUDOR FUND; Kansas City-based TWENTIETH CENTURY SELECT, which concentrates on companies with quarterly earnings higher than analysts had predicted; and WELLINGTON FUND, one of Vanguard Group's vehicles. Even so, Astrop muses, his affluent advisees sometimes show signs of distress and now require more hand holding than they did before last fall: ''Everybody's become so risk averse. One thing we notice is that every single little transaction receipt causes anxiety and stress. People call up with questions about every buy and sell transaction, even if it's just the most routine thing you could imagine. We never saw that before. People used to just look at how the whole portfolio did, at the end of each quarter, and ask their questions then if they had any. Not anymore.'' In such tense times, Madeleine Einhorn Glick finds her services much in demand. She has been managing money since 1969 and has long invested her clients' wealth solely in fixed-income securities: ''I used to be a balanced- fund manager, but I was far too busy. So I made a choice. I sold out all the stocks in my portfolios in 1973 and never went back.'' Glick founded the New York firm she now runs, MEG Asset Management, in 1980. Her clients include a number of Wall Street professionals. ''What these people want now is municipal bonds,'' she says. ''And we're being conservative not buying long-term munis.'' Two of her largest portfolios, at their owners' request, are entirely tied up in notes that will mature in less than a year; the portfolios are thus exposed to no market risk. Glick adds, ''Occasionally we'll use convertible bonds in place of munis. That's about as aggressive as we get these days.'' Another of Glick's specialties is junk bonds, which appeal almost exclusively to investors with the ability to shelter their income from the tax man. ''If you're in a 33% tax bracket, with state taxes included, junk bonds don't make much sense,'' explains Glick. ''But for someone who's totally sheltered, junk bonds' yields are attractive. If you pay zero taxes, you keep all the income.'' And yes, Virginia, the ravages of the 1986 Tax Act notwithstanding, it is still possible to be totally tax sheltered, although it is a more complicated task than ever. Joseph Fitzgerald, who manages investments for the $8.5 billion Private Bank division of Bankers Trust Co. in New York, agrees that municipal bonds, which lately have performed better than the taxable kind, are a good bet over the next 12 to 15 months given the current iffy political climate: ''In the next couple of years, we expect tax increases and we expect them to fall disproportionately on high-net-worth people. So this very strong, active tax- exempt market we're seeing now is just reflecting that anticipation.'' Fitzgerald also relies on eight- to ten-year tax-exempts and three- to six-year Treasuries. Fitzgerald sees investors' wariness of stocks as a persistent -- perhaps even permanent -- phenomenon: ''It's unlikely we'll ever go back to the high equity ratios we used to have in these accounts.'' For those clients who still want some exposure to the slings and arrows of stock ownership, Fitzgerald recommends investing in overseas markets. ''Global investing is a very important theme now. We're expanding our international research and offering people more opportunities overseas. The rule of thumb now is that up to 25% of the equities in any large account should be invested in Europe or Asia,'' Fitzgerald says. ''And we should have been doing this a few years ago, really.'' He has a point: As of late August, the Japanese stock market had edged up 6.5% since October of 1987, while the S&P 500 had taken a 20% stumble. Looking ahead, Fitzgerald hopes Bankers Trust analysts, who have been sent hither and yon to spot promising prospective investments in Switzerland, France, and Britain, will spot some sleeping beauties. ''We suspect that the really uncommon values today are in stocks that haven't yet been discovered,'' Fitzgerald says. ''And any stock that is listed on the New York Stock Exchange has, by definition, been discovered.'' Any bargains that remain on Pacific Basin stock exchanges seem unlikely to stay undiscovered for long. Indeed, the markets of the Far East are already awash under a tsunami of Western capital. In 1980 the total book value of shares trading on the Korean exchange barely reached $4 billion. By year-end 1987, adjusted for currency fluctuations, capitalization had grown tenfold to $40 billion. During the same period, Taiwan's stock market mushroomed from $6 billion to $56 billion, while Thailand -- Thailand? -- saw a quintupling, from $1.2 billion to $6 billion. ''The action has been in the Pacific,'' says Lilia Clemente. ''There is no doubt that these have been the strongest markets.'' THEY ARE ALSO the least familiar markets, riddled with regulatory and tax restrictions, daunting to even the most sophisticated globe-trotting value seeker. Clemente, who founded and runs Clemente Capital Inc. in New York, has made a specialty of sorting out the arcana of Asian investing for the well-to- do and adventurous. Born and raised in the Philippines, with a master's degree in economics from the University of Chicago, Clemente began buying Asian stocks in the late Sixties, as the first woman ever to co-manage the Ford Foundation's billions. She later ran Paine Webber's Atlas Fund, a wildly lucrative global mutual fund that proved so popular with smaller investors that it was ranked the top global fund in 1985. Now Clemente's own firm manages a number of similar funds and, for high- net-worth individuals, has formed a partnership called Clemente Global Investors. Twenty affluent clients have each committed a minimum of $150,000 to the new venture, which will concentrate on emerging markets and ascendant companies. Clemente's global savvy has also attracted some unwelcome attention from one surpassingly rich and famous investor: T. Boone Pickens III, son of the raider, has lately been trying to take over Clemente Global Growth Fund, a closed-end fund that trades on the Big Board in New York. IN THE QUEST for alternatives to Yankee stocks, some money managers have come up with imaginative devices. Monty Guild, once a research analyst at Security Pacific, has been investing on behalf of wealthy individuals for the past 20 years. Guild's office is in Los Angeles, and several of his 80-odd clients are successful entrepreneurs. Guild says he expects the current bearish mood on Wall Street to end ''sometime between March and September of 1989.'' In the meantime Guild has tallied nice profits from some speculative plays in foreign currencies. His latest gambit: shorting the Swiss franc. Simply put, the strategy involves a dollar-based investor borrowing Swiss francs, waiting for the currency to drop in value, paying back the loans in cheaper money, and converting the resulting profits back into dollars. ''You can do the same thing with deutsche marks,'' says Guild, ''but lately the Swiss franc has been better, because the Swiss government has not been as interested in keeping its currency up.'' The borrowed francs in his clients' portfolios earned big dollars this past summer, as the franc-to-dollar ratio drifted from 70 cents down to 62. Guild also keeps a weather eye on the global market for diamonds. ''Diamonds really got impossible starting in the early Eighties, when DeBeers lost control of supply and pricing,'' he recalls, ''so a lot of investors gave up on them then. And even after DeBeers reestablished itself -- well, it's a South African company, and some investors have ideological problems with that.'' But diamonds have lately been an apolitical investor's best friend. Since Guild began recommending them a year ago, the value of the stones his clients own has risen 23%. Some of the money that fled U.S. equities in recent months found refuge in other tangible investments -- but not, it seems, because of concern over possible inflation ahead. ''Clients really don't seem to be worried about inflation now,'' notes Guild. ''Six months ago, yes. But the Fed's willingness to tighten credit has taken care of that.'' One sign that he's right: Gold, that most traditional of inflation hedges, hasn't glittered lately. Prices have barely budged, and funds that specialize in precious metals are languishing. Indeed, the only gold anyone seems to be buying these days is the kind that can adorn fingers, wrists, and throats. ''What we are seeing now is that quite a few high-net-worth people want to cut loose and have a little fun with their money,'' observes one prominent West Coast money manager. ''My clients were so traumatized by last October, they're saying, 'The hell with it. I don't want just another piece of paper. Find me an investment I can enjoy.' '' Fine art, from Renoir to Rauschenberg, has been gaining popularity with the life-is-short school of investors for the past five years. In the past 12 months the trend seems to have accelerated. Auction houses in New York, London, and elsewhere have seen a steady influx of individuals eager to spend millions on something they can hang over the fireplace. Notes Karen Davidson, an assistant vice president at Sotheby's in New York: ''It's very hard to tell whether people are thinking of art as an investment or just for pleasure. Often we don't know who the buyers are. They may hire agents or dealers to bid on their behalf.'' At Christie's, Sotheby's crosstown competitor, a mystery investor paid a record $4.2 million last May for a painting by abstract expressionist Jasper Johns. The buyer's identity was unknown until August, when the Philadelphia Museum of Art displayed the work -- and announced that it was on loan from Norman Braman, who also owns the Philadelphia Eagles. Although such anonymity makes their motives hard to guess, many art lovers obviously expect to profit from their purchases. ''People have seen prices go up quite steadily, especially in impressionist and modern paintings. We've seen more competition and more bidding,'' Davidson says. She adds that the market for art has also become increasingly international. To bid on a coveted canvas, art fanciers -- many of them Japanese -- think nothing of flying halfway around the world, from Tokyo to London or New York. STILL, the auction houses are wary of seeming to be in the investment- counsel ing business, and for good reason. ''We never recommend that anyone buy a work of art as an investment,'' Roberta Maneker, of Christie's in New York, hastens to point out. ''It is true that art values stayed high after the stock market crash -- but the art market is really not analogous to the stock market, or any other financial market, because there is too much individual taste involved in pricing things. Art as an investment is very risky.'' It would be hard to imagine a faster-appreciating investment, tangible or not, than high-price residential real estate. In almost every part of the country the well-off call home, large houses -- the kind that sit on a few acres of grounds, with amenities like swimming pools, tennis courts, stables, and perhaps a stretch of private beach -- are fetching prices that defy imagination. The rush into real estate has been particularly frenzied in Southern California, where the average price of such properties has jumped 25% to 30% in the past year and shows no sign of faltering. Says Jay Goldinger, an investment counselor in Beverly Hills who looks after the portfolios of 100 affluent clients in the Far West: ''It's just absolutely wild. One of my clients has bought and sold three houses already this year, one after the other. He didn't even intend to, but people kept making such amazing offers that he couldn't turn them down.'' Goldinger is considering selling his own Beverly Hills home: ''My neighbor put her house up for sale and had a line of people standing outside the same day. I thought she was giving away money.'' Charles Willson, who has been selling real estate in Malibu since 1960, ticks off a number of demographic reasons for the boom, including a steady influx of 300,000 people into California every year from other parts of the country that makes land of any kind a valuable commodity. ''Today, whatever you buy around here is going up -- and I mean anything you choose to buy,'' he declares. ''Can any stockbroker make that kind of promise?'' Other affluent enclaves around the U.S. are seeing a similar, if somewhat more subdued, surge in high-price home buying. In Palm Beach, demand for multimillion-dollar houses has driven their prices up by more than 30% over the past year. In the Atlanta suburb of Buckhead, houses are hotter still. Observes William Astrop: ''The market values of some of my clients' homes have tripled since 1983. People watch it happening the way they used to watch the stock ticker -- from $1.8 million to $2.3 million to $2.8 million . . .'' But, as with the soaring stocks of yore, the hard part may be knowing when to take the profits and run. Letizia Gelles, a prominent purveyor of Beverly Hills real estate, thinks the bubble may be close to bursting. ''I wouldn't say a house is ever a good investment, because nothing is stable here,'' she says. After 19 years in the business, Gelles is philosophical: ''We've seen huge increases in prices, yes. But in other years, I've seen enormous decreases too. The best reason to buy a beautiful house is because you want to enjoy living in it.'' DESPITE the allure of myriad alternatives, a steadfast minority of upscale money managers are taking the long view and sticking with stocks. Sanford C. Bernstein & Co. in New York advises many thousands of clients (minimum account: $250,000) on where to put their money now, and the firm's policy encourages equity buying over the long haul. Says Roger Hertog, Bernstein's executive vice president: ''We don't think people ought to be making decisions based on what the market did yesterday or what it may do tomorrow afternoon.'' Hertog points to detailed statistical evidence that in the long-haul stocks are still the best deal around. For one thing, he notes, ''since the Depression, over ten-year holding periods, stocks have been the only liquid investment to consistently beat inflation.'' Frederick B. Taylor, who steers the investment policy at the $15 billion portfolio of U.S. Trust in New York, agrees. ''Not only do stocks treat you well in the long run, but they're a better value today than they were a year ago,'' he says. ''Theoretically, of course, you should buy stocks at low prices, and we think there are plenty of good values in equities now.'' In the years ahead, Taylor expects U.S. Trust to concentrate on shares in companies that are participating in the resurgence of the industrial heartland: ''The most promising stocks now are capital-goods, middle-America, productivity- driven types of things.'' Among these, Taylor favors FORD MOTOR CO., PITNEY BOWES, ILLINOIS TOOL WORKS, and REYNOLDS METALS. In three or four years, as investors forget last October's shocks, they may come to agree with Taylor: He expects a shift from real estate to stocks in the early 1990s. In the end, of course, Hertog and Taylor may well be right. Still, as one prominent New York money manager notes, ''the only wealthy individuals who are still buying stocks are those few who take their advice from stockbrokers.'' Most, still smarting from last October, are turning a deaf ear.