The survey found that 45 percent of TD AMERITRADE's clients surveyed agreed that news about the stock markets indicates that it is a good time to invest. Furthermore, 39 percent of investors surveyed claimed to have put that bullishness into action over the last month by investing new money in the markets. It is a sign that while conditions are not perfect, investors still feel compelled to stay engaged.

"There has never been a time when retail investors have had more to choose from in terms of information, products and tools to help guide their investment decisions," said Peter Sidebottom, executive vice president of product, marketing and client experience. "We are helping our clients find opportunities in a variety of markets -- up, down and even sideways -- and their continued engagement is abundantly clear in our research."

However, while positive sentiment is increasing, some bearishness on the part of retail investors remains. One in five investors surveyed reported removing some or all of their money from the markets in the last month, up from the 14 percent who reported doing so in April 2009.

And, while the number one destination for that money leaving the stock market has been and continues to be money markets (37 percent), more investors are taking money out of the markets to pay down mortgages or other debt. The response rate of 16 percent is an increase from 11 percent in April 2009.

Other findings included:

Retail investors surveyed believed that Financial Services (25 percent) and Technology (21 percent) would be the best performers in the near-term, and that Consumer Goods and Health Care (21 percent each) would be the poorest performers.

46 percent of investors surveyed reported a somewhat or very optimistic outlook for the U.S. economy, while 27 percent reported a somewhat or very negative outlook.

Nearly six in 10 (56 percent) retail investors surveyed said it will take three years or less for major market indices to regain all-time highs previously achieved in Fall 2007.