Investor Optimism Index Falls To Second-Lowest Level
27 Jan 10:58
By Lynn Cowan
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Index of Investor Optimism in January dropped to
its second lowest point since it first began tracking attitudes toward the
financial markets.
The index, a joint effort of UBS AG and the Gallup Organization, is currently
at 38, a decline of 14 points from December, according to the poll, which was
issued Monday. Conducted monthly, the index had a baseline of 124 when it was
established in 1996. The lowest point it reached was 29 in October; January's
reading is the second-lowest.
Investor expectations for short-term return over the next 12 months fell to
6.7% from 7.8% in December, marking the lowest level in the survey's history.
The decline in expectations is attributed to investors over the age of 40; the
attitudes of younger investors held steady.
According to the index, investors' concerns about the economy have increased,
with 40% of those surveyed now citing pessimism, up from 36% in December.
Thirty-seven percent of investors said the nation is experiencing a slowdown
and 26% say the U.S. is in a recession. Thirty-six percent believe the economy
is in a recovery or expansion.
Among those who say the economy is in a recession or slowdown, 41% believe it
will be at least two years or longer before the economy recovers, up from 35%
in November, the last time investors were polled on the subject. Fewer
investors, at 31%, expect a recovery within a year, down from 40% in November.
Sixty-six percent of investors believe it is very or somewhat likely that
President Bush and Congress will pass legislation that takes meaningful action
to deal with the nation's economic problems. Twenty-three percent believe this
outcome is not too likely, and 10% say it's not likely at all.
There was some divergence in the attitudes of investors polled, depending
upon how wealthy they were. Those with more than $100,000 are more likely to
view the current environment as a buying opportunity, with 61% of this group
saying now is a good time to invest, compared with 43% of people with $10,000
to $100,000 to invest.
The index survey was conducted from Jan. 1 to Jan. 15, and included 1,000
investors randomly selected from across the country. An investor is defined as
any head of a household or spouse in a household with total savings and
investments of $10,000 or more. The sampling error is plus or minus three
percentage points.
-By Lynn Cowan, Dow Jones Newswires; 202-628-9783; lynn.cowan@dowjones.com
(END) Dow Jones Newswires
01-27-03 1058ET |
