Traders work on the floor of the New York Stock Exchange moments before the closing bell as U.S. stocks rallied today on Feb. 1, 2013 in New York City. - 

You know it’s rough when an investment club stops investing. That’s in large part what happened in recent years at Gene Senter’s Dayton, Ohio, club. Last year, stocks accounted for only around half their roughly $100,000 portfolio. Spooked by the financial downturn, the mostly retired club members had moved the money to safer waters.

Their skittishness about stocks -- even as the S&P and Dow Jones Industrial Average recently hit multi-year highs -- reflects the thinking of a lot of American small investors. They know the importance of stocks in a portfolio, but worry about losing their shirts if the current bull market turns south.

Americans are returning to stocks, but slowly. Mutual fund tracking firm Lipper says that in 2013, stock funds have taken in $20.7 billion more than investors have pulled out. But that’s tip money compared to the far greater amounts investors took out in recent years, often at a loss. Wounds from the latest downturn are still fresh for many Americans.

“They got crushed in the crisis and they just have not come back,” says Tom Roseen, who heads Lipper’s research services.

He adds that many investors also got burned in the dot-com meltdown.

Washington State University finance professor John Nofsinger studies investor psychology. No matter how much media hype kicks up around a rising market, he says it’s not enough to distract investors from what’s happening in their lives.

“People still know friends or relatives that are either out of work or trying to get a better job or those kinds of things and so we’re still a little cautious,” Nofsinger says. “But now we’re at least positive cautious.”

“Positive cautious” is a far cry from enthusiastic. But that may be all the market can ask for from ordinary Americans whose retirement savings have been battered.

As for the Ohio investment club, it’s now wading back into stocks. Members are frustrated with the paltry returns of safe spots like money market funds. At their meeting last month, they took more than half of the cash that was on the sidelines and bought a new batch of stocks.

“We decided that we are investors and we want to be in there,” Senter explains. “Because you’re not getting anything with cash.”

Follow Mark Garrison at @GarrisonMark