Two years ago, the Gallup/UBS "Index of Investor Optimism -- U.S." stood at 185 in California -- 20 points above the level of the nation as a whole (165). California investors had the highest investor optimism in the nation as the year 2000 got underway. By the fourth quarter of that year, the Index had dropped to 128. During the first quarter of 2001, investor optimism in California fell to 80. With the arrival of the energy crisis, the Index in California fell to 51 and it stayed at this level (50) following the Sept. 11 terrorist attacks. Between the first quarter of 2000 and the third quarter of 2001, U.S. investor optimism in California plunged 130 points -- the largest decline in any major state.
During the fourth quarter of 2001, investor optimism in California stayed low with the Index at only 56. In the first quarter of 2002, however, investor optimism in California surged -- improving 65 points and reaching 121. This places investor optimism in California back above the national average (109) -- substantially higher than it was during the first quarter of 2001 (80) and fairly close to its fourth quarter of 2000 level (128).
The biggest improvements in investor optimism in California have come along the economic dimension. While the personal dimension of the Index has also improved, it has recovered more slowly.
Two years ago, the Gallup/UBS "Index of Investor Optimism -- U.S." stood at 171 in New York -- slightly above the level of the nation as a whole (165). By the fourth quarter of that year, the Index had fallen to 113. During the first quarter of 2001, investor optimism in New York fell to 64. The Index in New York stayed at this level for the first three quarters of 2002, and then fell to 49 in the fourth quarter following Sept. 11. Between the first quarter of 2000 and the third quarter of 2001, U.S. investor optimism in New York plunged 122 points -- nearly matching the largest decline in any major state.
In the first quarter of 2002, however, investor optimism in New York, like that in California surged -- improving 67 points and reaching 116. This places investor optimism in New York back at the national average (109) -- substantially higher than it was during the first quarter of 2001 (64) and slightly above its fourth quarter of 2000 level (113).
Several other major states show a pattern of investor optimism very similar to that of California and New York including New Jersey, Pennsylvania and Ohio.
Some states show substantially less volatility in investor optimism over the same period. For example, two years ago, the Gallup/UBS "Index of Investor Optimism -- U.S." stood at 184 in Texas -- 19 points above the level of the nation as a whole (165). Texas investors had the second-highest investor optimism in the nation as the year 2000 got underway. By the fourth quarter of that year, the Index had fallen to 141. During the first quarter of 2001, investor optimism in Texas fell further to 94. But investor optimism in Texas remained in the 90 to 113 range for the remained of 2001 despite the events of Sept. 11. Between the first quarter of 2000 and the third quarter of 2001, U.S. investor optimism in Texas fell 94 points -- a largest decline but a lot less than the decline experienced by California and New York.
During the first quarter of 2002, investor optimism in Texas increased 20 points and reached 131. This places investor optimism in Texas back substantially above the national average (109) -- far higher than it was during the first quarter of 2001 (94) and 10 points below its fourth quarter of 2000 level (141).
The biggest improvements in investor optimism in Texas have come along the economic dimension. Of course, the personal dimension of the Index has also improved in Texas in 2002.
Investor optimism in Florida and Michigan show a pattern very similar to that of Texas'. The pattern in Illinois is also similar to that of these states in that investor optimism did not plunge in 2001 as it did in California and New York. On the other hand, investor optimism in Illinois began the year 2000 substantially below the national average and ended the first quarter of 2002 in the same relative position.
*Results for the Gallup/UBS "Index of Investor Optimism – U.S." are based on monthly interviews with about 1,000 U.S. investors, aged 18 and older. For results based on each of these samples, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3%. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
