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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (9397)	10/19/1999 11:36:00 AM
From: Justa Werkenstiff	Respond to of 15132

Good News on the Sentiment Front Optimism Declines in October, PaineWebber's Monthly Index Shows - Vast Majority of Investors Aware of Year 2000 Challenge, But Few Express Great Concern - NEW YORK, Oct. 19 /PRNewswire/ -- Optimism declined in October as investors expressed concerns about the short-term performance of the financial markets, according to the Index of Investor Optimism(R). A joint effort of PaineWebber Incorporated and the Gallup Organization, the Index shows that investors remain bullish about the long-term outlook for the financial markets, albeit to a lesser degree than earlier this year. Currently at 130, the Index fell 14 points in October, from 144 in September. Conducted monthly, the Index had a baseline of 100 when it was established in October 1996. Thirty-one percent of investors -- a record level -- say the stock market will go down in the next three months compared with 22 percent in September. Optimism regarding the performance of the stock markets declined 6 percentage points in October, to 57 percent, from 63 percent in September. Similarly, the number of investors who say now is a good time to invest in the markets fell to 64 percent in October, compared with 72 percent in September. Expectations for return in the next 12 months remained stable, rising slightly to 15.7 percent, from 14.9 percent, while investors say they expect they stock market to generate average annual returns of 16 percent over the next 10 years, compared with 14.2 percent in September. Noting that optimism declined among all investors except those with more than 20 years of experience, Mark B. Sutton, president of PaineWebber's Private Client Group, urged investors to be cautious and to remain focused on disciplined investment plans. "Investor outlook appears to be closely linked to length of investing experience," Mr. Sutton said. "More experienced investors understand the dynamics of the markets and recognize that successful investing is achieved by following long-term strategies. As such, these investors are better able to cope with the volatility of day-to-day market movements." The Index also shows declines in optimism regarding unemployment and economic growth. The number of investors who are optimistic about the unemployment rate declined to 63 percent, from 70 percent in September. Investor outlook for economic growth fell to 67 percent in October, compared with 72 percent in September. In sharp contrast, investors are significantly more optimistic about interest rates, despite lingering uncertainty regarding future rate increases by the Federal Reserve. The number of investors who are optimistic about rates increased 7 percentage points, rising to 52 percent, compared with 45 percent in September. The polling for the Index was completed on October 14, before rising producer-prices and cautionary comments from Fed chairman Alan Greenspan caused sharp declines in both the equity and fixed-income markets. As part of the Index, PaineWebber also surveyed investors regarding the Year 2000 challenge. The vast majority of investors, 95 percent, are aware of Y2K, but are not especially concerned about its impact on their investments, compared with 93 percent in August when investors were last polled regarding Y2K. Most investors plan to maintain their banking activities (95 percent) and investment practices (94 percent) into the new year. Few investors say they are likely to withdraw money from the markets, stockpile cash or buy gold as a means of preparing for Y2K. These findings are part of the 18th Index of Investor Optimism, which was conducted from October 1 to October 14. To track and measure Index changes on an ongoing basis, new samplings are taken monthly. Dennis J. Jacobe, research director for Gallup, said the sampling included 1,008 investors randomly selected from across the country. For this study, the American investor is defined as any person who is head of a household or a spouse in any household with total savings and investments of $10,000 or more. Nearly 40 percent of American households has at least this amount of savings and investments. The sampling error in the results is plus or minus three percentage points.