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To: Scott Kleinhans who wrote (65492)	9/14/1998 6:27:00 PM
From: D.J.Smyth	Respond to of 176387

ot 17:22 DJS PaineWebber Investor Index Shows Market Fall Hasn't Hurt Optimism 17:22 DJS PaineWebber Investor Index Shows Market Fall Hasn't Hurt Optimism NEW YORK -(Dow Jones)- Investor optimism remains high, despite sustained volatility and substantial declines in the financial markets, resulting in part from economic crises in Asia and Russia and domestic political controversies, according to the Index of Investor Optimism. The Index, a joint effort of PaineWebber Inc. and the Gallup Organization, shows that investors are somewhat concerned about short-term economic growth and the performance of financial markets, the companies said Monday. However, investors remain highly optimistic about long-term market performance and are willing to accept market volatility as a normal part of investing, the Index shows. Investors said financial crises in Asia, including those in Japan, and economic problems in Russia were seriously affecting domestic markets. The vast majority (93%) of investors said problems in Japan were hurting the U.S. investment climate, the Index showed. More broadly, 88% of investors said problems in several Asian nations were also damaging to U.S. markets, followed by those in Russia (84%). The Index showed 53% of investors said controversies surrounding President Clinton's Administration were also harmful. Recent market events have caused investors to lower their expectations for return in 1999. Overall, investors expect a 12.9% average rate of return on their portfolios, compared with 15.2% in June. The number of investors who expect short-term rates of return of 5% to 9% has risen to 27%, from 17% in June, the Index showed. The number of investors who expect a rate of return of 15% or more has declined to 20%, from 34% in June. Still, 65% of investors say now is a good time to invest in the markets, compared with 72% in June. Investors are generally confident about the long-term performance of the economy and the financial markets, the Index shows. Investors say they expect the financial markets to provide average annual returns of 15.1% during the next five years and 15.9% during the next 10 years. Most, or 73%, of investors say they expect market volatility to increase or remain at current levels compared with 79% in December 1997. About 74% of investors say it is unlikely that the U.S. will be in a recession within the next six months. After the August market decline, only 3% of investors sold portions of their portfolios, while 14% viewed the decline as a buying opportunity. About 80% of investors elected to maintain their current investments, the Index showed. About 10% of investors say the market is undervalued, compared with 4% in June, but there has been no change in the 46% of investors who say the stock market is overvalued. The number of investors who say the market is valued about right fell to 24% from 25% in June. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. (:PWJ) 09/14 5:22p CDT