GALLUP NEWS SERVICE
Investor optimism increased slightly for the second month in a
row in September, according to the Index of Investor Optimism -- a
joint effort of UBS and The Gallup Organization. The Index is now
at 60, up modestly from last month's 52 and July's 46 -- the low
point for the Index since its inception in October 1996. The Index
was at 121 in March of this year -- twice its current level.
The lack of optimism on the part of investors is not surprising
given the growing signs of economic weakness during recent weeks.
Of course, the 1,000-point drop in the stock market over the past
month certainly hasn't done anything to bolster investor optimism
this September.
The fact is that many investors are still not convinced that the
economy has hit bottom and that we are on the road to economic
recovery. Half of all investors (52%) say they think the recent
economic downturn has not hit bottom; 45% say it has. And
while 55% of U.S. investors say the economy will improve slowly
over time, 44% say it will get worse before it gets better. None of
these investor perceptions is good news for the nation's retailers
or the members of Congress running for re-election in November.
Overall Investor Optimism Stabilizes
Overall investor optimism fell from 121 in March to 89 in April,
and was virtually unchanged at 90 in May. In June, the Index fell
again to 72, while in July, it slid to its six-year low of 46. In
August, the overall Index increased slightly to 52 before reaching
60 in September. The two recent increases in the overall Index
suggest that there has been a much-needed stabilization of investor
sentiment over the past couple of months.
The personal dimension of the Index also stabilized in
September. In August, the personal dimension declined modestly to
46 from 48, but in September, it increased modestly to 51. Still,
from an economic outlook perspective, this is the most troubling
aspect of the September results. Investor perceptions along the
personal dimension are still below their very low level -- 61 -- of
exactly one year ago.
The economic dimension increased from a –2 in July to a +6
in August. In September, it increased another 3 points, to 9. While
this September 2002 result is far below the 41 of March 2002, it is
much better than the –11 of September 2001.
Index of Investor Optimism – U.S.
October 1996 to September 2002 |
 |
Substantial Investor Optimism Improves
Overall substantial investor optimism fell from 155 in March to
111 in April and 101 in May. In June, it fell again to 90 before
plunging to its six-year low of 49 in July – its previous low
was 54 in September 2001. The overall substantial investor index
increased 22 points to 71 in August and then another 3 points to 74
in September. Substantial investors -- those with $100,000 or more
of investable assets -- are more optimistic than are other
investors, who had an index score of 51 in September.
Substantial investor optimism increased along both the personal
and the economic dimensions in August and maintained those
increases in September. The personal dimension of the substantial
investor index increased 6 points, from 51 in July to 57 in August,
and then stayed at that level in September (56). The economic
dimension of the substantial investor index increased 16 points,
from –2 in July to +14 in August. In September, the economic
dimension increased marginally to 18.
Index of Substantial Investor Optimism
– U.S.
October 1996 to September 2002 |
 |
Older Investors Still Less Optimistic Than Younger
Investors
In September, the overall Index for investors 40 years of age or
older was at 53 -- up from 46 in August and 36 in July, but down
from 121 in March. Still, it remains near its September 2001
reading of 48.
In sharp contrast, the Index for investors less than 40 years of
age was 88 in September -- up from 74 in August. It remains below
its reading of 129 in March, but is also well above its September
2001 low of 62. Accordingly, while the optimism of both older and
younger investors improved slightly in September, older investors
clearly remain less optimistic than do their younger
counterparts.
Index of Investor Optimism:
By Age of Investor |
 |
Survey Methods
These results are based on telephone interviews with 1,004
investors, aged 18+, conducted Sept. 1-15, 2002. For results based
on the total sample of investors, one can say with 95% confidence
that the margin of sampling error is ±3 percentage
points.
