Latest media releases


Investor Optimism dips again in September, according to UBS Index

| Media Releases Americas

Nearly half of investors say re-electing Bush would buoy investment climate versus 29 percent who say Kerry would be positive for the markets.

NEW YORK, September 27, 2004 - Optimism dropped again this month, with investors expressing slightly less confidence in their personal investments, according to the UBS Index of Investor Optimism, a joint effort of UBS and the Gallup Organization.

Currently at 74, the overall Index reached a four-month low, down from 77 in August. Conducted monthly, the Index had a baseline of 124 when it was established in 1996.

The decrease can be attributed to a 5-point decline in the Index's personal dimension, which measures investors' confidence in their ability to reach investment targets and maintain income. However, this month's drop was offset by a 2-point increase in the economic dimension, which measures economic growth, unemployment, stock market performance and inflation. Of those surveyed:

  • 52 percent say they are confident in the prospects for economic growth in the next 12 months, unchanged from last month and up 3 percentage points from a year ago;

  • 44 percent are optimistic on unemployment, up 1 from last month and up 13 from a year ago;

  • 47 percent report they are optimistic about the stock market's performance, up 1 from last month and down 8 from a year ago;

  • 42 percent remain optimistic about inflation, up 3 from last month and up 5 from a year ago;

  • 56 percent expressed confidence in their ability to achieve investment targets during the next 12 months, up 1 from last month and up 2 from a year ago;

  • 67 percent report they are optimistic that they'll achieve investment targets during the next five years, unchanged from last month and from a year ago;

  • 65 percent say they are optimistic in their ability to maintain income during the next 12 months, unchanged from last month and up 3 from a year ago.

Average expectations for return during the next 12 months increased to 10.1 percent from 9.3 percent in August, and 56 percent of investors surveyed believe now is a good time to invest in the financial markets, down 4 percentage points from last month.

According to the Index, 52 percent consider the economy to be in either a sustained expansion or recovery, compared with 54 percent last month. Conversely, 47 percent believe the economy is either in a slowdown or recession, compared with 44 percent last month. Of those who believe the economy is in a slowdown or recession, 60 percent believe it will be at least two years before the U.S. economy is on the way to recovery, up from 47 percent last month.

This month, investors were asked about factors affecting the investment climate. The majority, 56 percent, cites energy prices and, separately, outsourcing of jobs to foreign countries as hurting the markets a great deal. This is followed by the issue the current situation in Iraq, 50 percent; the federal budget deficit, 47 percent; questionable accounting practices in business, 43 percent; and the threat of more terrorist attacks, 38 percent.

In addition, investors were polled about the effect the presidential election will have on the U.S. investment climate. Few investors, 20 percent, think that uncertainty about the outcome of the presidential election is hurting the investment climate a lot. Still, 48 percent say a Bush win would be positive for the investment climate, while 29 percent say a Kerry win would be positive. Last month, sentiment was more evenly divided: 41 percent to 36 percent in favor of a Bush win. Notably, 97 percent of those polled report they plan to vote in the presidential election with 50 percent saying they will vote for Bush and 36 percent saying they intend to vote for Kerry.

When asked whether they approve or disapprove of how President Bush is handling his job, 55 percent of those surveyed say they approve and 43 percent disapprove. Investors were asked whether they approve or disapprove of how Bush has handled several topics. The majority, 65 percent, approve of Bush's handling of terrorism. This is followed by education, 54 percent; the situation in Iraq, 51 percent; the economy, 50 percent; and foreign affairs, 50 percent.

These findings are part of the 77th Index of Investor Optimism, which was conducted September 1 to September 19. 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 809 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 have at least this amount in savings and investments. The sampling error in the results is plus or minus four percentage points.

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions.

UBS is one of the world's financial services firms. In the United States, it is the third largest private client business with a client base of more than 2 million investors. UBS's client and financial advisors provide a comprehensive range of services customized for wealthy individuals, ranging from asset management to estate planning and from corporate finance to art banking. Its American network of financial advisors manages roughly 634 billion Swiss francs in invested assets and provides sophisticated services through consultative relationships with affluent and high net worth clients. In Switzerland and internationally, UBS has more than 140 years of private banking experience, an extensive global network of 164 offices and nearly 701 billion Swiss francs in invested assets.

Additional information about the Index of Investor Optimism can be found at

month

2004

2003

2002

2001

2000

1999

1998

1997

1996

December

104

52

88

106

174

141

151

November

93

41

84

130

148

125

October

69

29

86

132

139

124

September

74

54

60

50

147

160

147

151

August

77

61

52

76

160

149

July

88

54

46

74

143

166

June

95

77

72

85

149

146

160

152

May

71

42

90

90

155

163

April

73

66

89

81

140

168

March

85

5

121

82

150

151

161

February

97

9

92

77

168

167

158

January

108

38

115

96

178