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Investor optimism increases for fourth straight month.

New York | | Media Releases Americas

Highest Level in Year and a Half. Investors Confident about Outlook for Economic Recovery. Energy and Healthcare Top Investor Concerns for 2006.

NEW YORK, January 23, 2006 - Investor optimism has surged to a 19-month high, according to the latest UBS/Gallup Index of Investor Optimism, with investors continuing to express confidence in the performance of the U.S. stock market. Now at 93, the Index is up 14 points from last month and 59 points since September 2005. The last time the Index was this high was in June 2004, when it reached 95. It has a baseline of 124 from when it was launched in October, 1996.

The continued rebound of the Index over recent months appears to reflect higher stock prices, on balance (the Dow Jones Industrial Average has seen a 9 percent increase since mid-October 2005) and a retreat in gasoline prices from their very high peak around Labor Day. Optimism about the performance of the U.S. stock market is up 4 percentage points from last month and 16 points from July. Fifty-eight percent of investors characterize the economy as being in a sustained expansion or recovery, up from 50 percent who expressed that view last month and just 33 percent last October.

Sixty-seven percent of investors are optimistic about achieving their investment targets over the next 12 months compared with 60 percent in December. Investors' longer-term outlook also improved, with 70 percent of investors optimistic about achieving their investment goals over the next 5 years (as compared with 66 percent in December).

In looking to 2006, almost seven in ten investors say that healthcare costs and energy prices -- the top listed issues measured in the poll -- will be "extremely" important. The availability of jobs was the third major concern with 59 percent of investors registering it as "extremely" important. It is interesting to note that healthcare, energy prices and jobs ranked above other issues such as the threat of terrorism and the situation in Iraq, despite the prominence of the latter issues in the news media.

"Investors are clearly expressing renewed confidence in the economy and financial markets while keeping a watchful eye on domestic pocketbook issues." said Mike Ryan, Head of UBS Wealth Management Research.

Only 26 percent of investors say that conditions in the housing market will be extremely important to them in 2006 suggesting that investors do not share economists' concerns about a housing bubble.

These findings are part of the 94th Index of Investor Optimism, which was conducted January 2 to January 15. 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 801 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 leading financial firms, serving a discerning global client base. As an organization, it combines financial strength with an international culture that embraces change. As an integrated firm, UBS creates added value for clients by drawing on the combined resources and expertise of all its businesses.

UBS is the world's largest wealth manager, a top tier investment banking and securities firm, and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.

UBS is present in all major financial centers worldwide. It has offices in 50 countries, with 39% of its employees working in the Americas, 38% in Switzerland, 16% in Europe and 7% in the Asia Pacific time zone. UBS's financial businesses employ more than 68,000 people around the world.

month

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

December

79

79

104

52

88

106

174

141

151

November

50

69

93

41

84

130

148

125

October

47

62

69

29

86

132

139

124

September

34

74

54

60

50

147

160

147

151

August

61

77

61

52

76

160

149

July

58

88

54

46

74

143

166

June

54

95

77

72

85

149

146

160

152

May

50

71

42

90

90

155

163

April

52

73

66

89

81

140

168

March

74

85

5

121

82

150

151

161

February

82

97

9

92

77

168

167

158

January

93

76

108

38

115

96

178


New York, January 23, 2006
UBS