America's millionaires are growing more cautious on the stock market and think this year's rally will fade in 2018, according to the CNBC Millionaire Survey.
Millionaires are more cautious about the stock market than they've been in years, with more than a third saying the market will be flat to down next year.
Generally, they're still calling for upside: 41 percent say it will be up between 5 and 10 percent. But the forecasts are the most bearish since CNBC started its Millionaire Survey in 2014.
"They are cautiously pessimistic," said George Walper, president of Spectrem Group, the wealth-research firm that conducts the Millionaire Survey with CNBC. "They think it would be great if the market went up from here or even stayed flat. But it's been a big run-up this year and they're just not sure it's realistic."
Millionaire attitudes toward stocks are important since the top 10 percent of Americans — essentially the millionaires — own about 85 percent of stocks.
Yet millionaire attitudes toward the markets and the economy are highly partisan. Three-quarters of Democratic millionaires say the economy will be the same or weaker next year. Two-thirds of Republican millionaires say the economy will be stronger.
Nearly three-quarters of Republican millionaires say the market will be up more than 5 percent — and nearly a third say it will be up double digits. More than a quarter of Democratic millionaires say the market will be flat or down.
Millionaires say the biggest risk to their wealth and the stock market is government dysfunction in Washington. Forty-four percent of millionaires say government dysfunction is the biggest risk to the economy, up from 31 percent in the spring. It ranked as the No. 1 worry for both Democrats and Republicans.
Walper said the concern is over how polarized Washington has become, with laws and policies backed only by one party.
"I think millionaires have the same fears as a lot of people. That when you have policies backed by only one party, voted straight down party lines, that could become a problem in the future."