American Investors' 'Bunker Mentality' Biggest Hurdle For ManagersAs the three-day Morningstar Investment Conference comes to a close, the common theme has been the fund manager's collective plight: dealing with timid American investors.

"Americans are in a bunker mentality right now, not knowing whether they want to invest. And when they come out of the bunker, they won't step full on the gas like the baby boomers looking to get rich off their retirement," said Scott Burns, Morningstar's director of fund research. "Generation X, the bulk of investors, are looking lot more cautious."

This reality has the pros debating best ways to coax timid investors off the sidelines and back into the stock market.

GMO's star investor Jeremy Grantham , for example, is doing this by being underweight US equities, and overweight international stocks. He says he's positioning himself for a risk-off, "slower growth world." Going international, as it turns out, is a popular strategy."There are more attractive stocks in international markets today. For one, they’re much more fairly valued — and cheaper," said John Fenley, portfolio manager for the Westcore International Small Cap Fund .

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