GALLUP NEWS SERVICE
Investor optimism rebounded sharply in July, soaring to its highest level since February of this year, and is at its second-highest level ever. According to the latest survey of about 1,000 investors across the country, conducted for PaineWebber by The Gallup Organization, the overall Index now stands at 171, up from 131 last month. The Index was standardized at 100 when it was first instituted in October 1996. The Index reached its highest point in February 1999 when it stood at 184. The current survey was conducted from July 1-14, 1999, and includes a national sample of 1,005 investors with investable assets of at least $10,000.
INVESTOR ATTITUDES: THE INDEX
| INDEX OF INVESTOR OPTIMISM | ||||
|---|---|---|---|---|
| Overall | Personal | Economic | Governmental | |
| '99 July | 171 | 115 | 65 | -9 |
| '99 June | 131 | 100 | 59 | -28 |
| '99 May | 156 | 110 | 68 | -22 |
| '99 April | 165 | 114 | 71 | -20 |
| '99 March | 145 | 108 | 57 | -20 |
| '99 February | 184 | 110 | 76 | -2 |
| '98 December | 147 | 108 | 56 | -17 |
| '98 September | 158 | 104 | 63 | -9 |
| '98 June | 162 | 105 | 71 | -14 |
| '98 March | 171 | 104 | 73 | -6 |
| '97 December | 126 | 103 | 62 | -39 |
| '97 September | 141 | 101 | 62 | -22 |
| '97 June | 119 | 104 | 57 | -42 |
| '97 February | 87 | 97 | 43 | -53 |
| '96 November | 95 | 99 | 40 | -44 |
| '96 October | 100 | 95 | 41 | -36 |
In part, this surge in investor optimism may have resulted from the way the Federal Reserve Board moderated the recent rise in interest rates, reducing the credibility of those asserting the view that the board would be more aggressive toward interest rates. The strong economy and the projections of enormous federal budget surpluses in the years ahead may also have played a significant part in raising the level of investor optimism.
The survey shows that among investors, personal optimism reached a new record and now stands at 115 -- a result of the good economy and the strong markets. Governmental optimism improved to a -9, reflecting sharply reduced pessimism about the federal budget. Optimism along the economic dimension also increased to 65 from 59 a month earlier, but this leaves economic optimism at about an average level for 1999.
Investors Expect Sharply Higher Rates of
Return
Investor expectations soared along with investor optimism during
July. Investors now expect higher annual average rates of return
over the coming months than they have at any point since the Index
began measuring investor rate expectations a year ago (June
'98).
On average, investors say that they got a 17.4% annual rate of return on their portfolios during the past 12 months. This is up significantly from the 16.1% investors reported in June. It is also the highest level reported since the Index began tracking investor rates of return.
Investors expect to get, on average, a 16.6% annual rate of return on their portfolios during the next 12 months. This is up significantly from the 14.9% investors said they expected in June. It is also the highest level reported since the Index began tracking investor expectations for their future rates of return.
Not surprisingly, investor expectations for the market also increased significantly. In July, investors say they expect the market to provide, on average, a 15% annual rate of return during the next 12 months. This is up significantly from the 13% investors said they expected in June. Once again, it is also the highest level reported since the Index began tracking investor expectations of future rates of return.
Investors say that the minimum acceptable annual rate of return on their portfolios during the past 12 months is 12.3%. This is up significantly from the 10.8% investors reported in June. It is also the highest level reported since the Index began tracking investor expectations a year ago.
Finally, more than three-quarters of all investors say that now is a good time to invest in the financial markets, compared with 71% who said that last month.
INDEX OF INVESTOR OPTIMISM TREND COMPARED BY GENDER OF INVESTOR AMONG TYPES OF INVESTORS
A. OVERALL INDEX
| SUBSTANTIAL INVESTORS | AVERAGE INVESTORS | |||
|---|---|---|---|---|
| Male | Female | Male | Female | |
| Overall Optimism Index | ||||
| '99 July | 213 | 208 | 171 | 125 |
| '99 June | 165 | 152 | 105 | 124 |
| '99 May | 201 | 159 | 161 | 122 |
| '99 April | 198 | 191 | 180 | 121 |
| '99 March | 161 | 186 | 144 | 118 |
| '99 February | 228 | 233 | 159 | 154 |
| '98 December | 184 | 170 | 142 | 113 |
| '98 September | 196 | 181 | 151 | 129 |
| '98 June | 201 | 193 | 156 | 128 |
| '98 March | 195 | 153 | 184 | 152 |
| '97 December | 180 | 140 | 137 | 71 |
| '97 September | 194 | 175 | 140 | 99 |
| '97 June | 150 | 133 | 143 | 69 |
| '97 February | 135 | 108 | 74 | 57 |
| '96 November | 133 | 116 | 90 | 64 |
| '96 October | 119 | 114 | 106 | 84 |
B. PERSONAL INDEX
| SUBSTANTIAL INVESTORS | AVERAGE INVESTORS | |||
|---|---|---|---|---|
| Male | Female | Male | Female | |
| Personal Optimism Index | ||||
| '99 July | 132 | 140 | 109 | 97 |
| '99 June | 125 | 113 | 87 | 89 |
| '99 May | 135 | 118 | 110 | 90 |
| '99 April | 125 | 128 | 113 | 102 |
| '99 March | 122 | 122 | 102 | 98 |
| '99 February | 138 | 120 | 98 | 96 |
| '98 December | 127 | 120 | 104 | 92 |
| '98 September | 119 | 116 | 105 | 88 |
| '98 June | 122 | 125 | 99 | 91 |
| '98 March | 129 | 100 | 103 | 89 |
| '97 December | 124 | 120 | 97 | 86 |
| '97 September | 128 | 115 | 92 | 89 |
| '97 June | 120 | 121 | 111 | 79 |
| '97 February | 122 | 109 | 83 | 84 |
| '96 November | 119 | 115 | 89 | 82 |
| '96 October | 112 | 119 | 87 | 86 |
C. ECONOMIC INDEX
| SUBSTANTIAL INVESTORS | AVERAGE INVESTORS | |||
|---|---|---|---|---|
| Male | Female | Male | Female | |
| Economic Optimism Index | ||||
| '99 July | 84 | 76 | 65 | 48 |
| '99 June | 55 | 63 | 64 | 54 |
| '99 May | 94 | 68 | 68 | 54 |
| '99 April | 93 | 70 | 76 | 51 |
| '99 March | 61 | 77 | 59 | 48 |
| '99 February | 91 | 86 | 71 | 67 |
| '98 December | 71 | 55 | 60 | 40 |
| '98 September | 76 | 67 | 63 | 51 |
| '98 June | 83 | 78 | 74 | 57 |
| '98 March | 74 | 65 | 90 | 61 |
| '97 December | 86 | 64 | 65 | 42 |
| '97 September | 77 | 61 | 69 | 47 |
| '97 June | 67 | 60 | 70 | 34 |
| '97 February | 58 | 49 | 50 | 24 |
| '96 November | 59 | 44 | 42 | 29 |
| '96 October | 48 | 32 | 50 | 34 |
D. GOVERNMENTAL INDEX
| SUBSTANTIAL INVESTORS | AVERAGE INVESTORS | |||
|---|---|---|---|---|
| Male | Female | Male | Female | |
| Governmental Optimism Index | ||||
| '99 July | -3 | -9 | -4 | -20 |
| '99 June | -15 | -24 | -46 | -18 |
| '99 May | -28 | -27 | -17 | -22 |
| '99 April | -20 | -17 | -9 | -32 |
| '99 March | -22 | -13 | -17 | -25 |
| '99 February | -1 | 27 | -10 | -9 |
| '98 December | -14 | -5 | -22 | -19 |
| '98 September | 1 | -2 | -17 | -10 |
| '98 June | -4 | -10 | -17 | -21 |
| '98 March | -8 | -12 | -9 | 2 |
| '97 December | -30 | -44 | -25 | -57 |
| '97 September | -11 | -1 | -21 | -37 |
| '97 June | -37 | -48 | -38 | -44 |
| '97 February | -45 | -50 | -59 | -51 |
| '96 November | -45 | -43 | -41 | -47 |
| '96 October | -41 | -37 | -31 | -34 |
INDEX OF INVESTOR OPTIMISM TREND COMPARED BY TYPE OF INVESTOR AND GENDER OF INVESTOR
A. OVERALL INDEX
| OVERALL | TYPE OF INVESTORS | GENDER OF INVESTORS | |||
|---|---|---|---|---|---|
| Average | Substantial | Male | Female | ||
| Overall Optimism Index | |||||
| '99 July | 171 | 148 | 211 | 187 | 154 |
| '99 June | 131 | 114 | 159 | 128 | 134 |
| '99 May | 156 | 140 | 183 | 177 | 134 |
| '99 April | 165 | 151 | 191 | 187 | 140 |
| '99 March | 145 | 130 | 171 | 152 | 138 |
| '99 February | 184 | 157 | 230 | 187 | 179 |
| '98 December | 147 | 130 | 180 | 159 | 129 |
| '98 September | 158 | 140 | 190 | 169 | 144 |
| '98 June | 162 | 143 | 197 | 174 | 147 |
| '98 March | 171 | 167 | 178 | 188 | 153 |
| '97 December | 126 | 105 | 165 | 154 | 92 |
| '97 September | 141 | 119 | 181 | 161 | 119 |
| '97 June | 119 | 106 | 143 | 145 | 89 |
| '97 February | 87 | 66 | 124 | 97 | 74 |
| '96 November | 95 | 78 | 127 | 107 | 78 |
| '96 October | 100 | 95 | 118 | 107 | 92 |
B. PERSONAL INDEX
| OVERALL | TYPE OF INVESTORS | GENDER OF INVESTORS | |||
|---|---|---|---|---|---|
| Average | Substantial | Male | Female | ||
| Personal Optimism Index | |||||
| '99 July | 115 | 103 | 136 | 118 | 112 |
| '99 June | 100 | 88 | 120 | 102 | 97 |
| '99 May | 110 | 99 | 128 | 120 | 99 |
| '99 April | 114 | 108 | 127 | 118 | 110 |
| '99 March | 108 | 100 | 122 | 111 | 105 |
| '99 February | 110 | 97 | 131 | 114 | 104 |
| '98 December | 108 | 99 | 125 | 113 | 100 |
| '98 September | 104 | 97 | 118 | 110 | 96 |
| '98 June | 105 | 95 | 123 | 108 | 101 |
| '98 March | 104 | 96 | 118 | 113 | 93 |
| '97 December | 103 | 92 | 123 | 108 | 96 |
| '97 September | 101 | 90 | 122 | 106 | 96 |
| '97 June | 104 | 95 | 119 | 115 | 92 |
| '97 February | 97 | 84 | 117 | 100 | 93 |
| '96 November | 99 | 86 | 118 | 102 | 95 |
| '96 October | 95 | 86 | 115 | 97 | 94 |
C. ECONOMIC INDEX
| OVERALL | TYPE OF INVESTORS | GENDER OF INVESTORS | |||
|---|---|---|---|---|---|
| Average | Substantial | Male | Female | ||
| Economic Optimism Index | |||||
| '99 July | 65 | 57 | 80 | 72 | 58 |
| '99 June | 59 | 59 | 58 | 60 | 57 |
| '99 May | 68 | 60 | 82 | 79 | 58 |
| '99 April | 71 | 63 | 83 | 83 | 57 |
| '99 March | 57 | 51 | 67 | 60 | 54 |
| '99 February | 76 | 69 | 89 | 79 | 73 |
| '98 December | 57 | 52 | 67 | 65 | 44 |
| '98 September | 63 | 57 | 72 | 68 | 56 |
| '98 June | 71 | 66 | 81 | 78 | 64 |
| '98 March | 73 | 75 | 70 | 83 | 62 |
| '97 December | 62 | 54 | 77 | 73 | 49 |
| '97 September | 62 | 58 | 68 | 72 | 51 |
| '97 June | 57 | 52 | 64 | 69 | 43 |
| '97 February | 43 | 37 | 54 | 52 | 32 |
| '96 November | 40 | 36 | 53 | 46 | 31 |
| '96 October | 41 | 41 | 42 | 48 | 32 |
D. GOVERNMENTAL INDEX
| OVERALL | TYPE OF INVESTORS | GENDER OF INVESTORS | |||
|---|---|---|---|---|---|
| Average | Substantial | Male | Female | ||
| Governmental Optimism Index | |||||
| '99 July | -9 | -12 | -6 | -4 | -16 |
| '99 June | -28 | -33 | -19 | -34 | -20 |
| '99 May | -22 | -19 | -27 | -22 | -23 |
| '99 April | -20 | -20 | -19 | -14 | -27 |
| '99 March | -20 | -21 | -18 | -19 | -21 |
| '99 February | -2 | -9 | 10 | -6 | 2 |
| '98 December | -18 | -21 | -12 | -19 | -15 |
| '98 September | -9 | -14 | 0 | -10 | -8 |
| '98 June | -14 | -18 | -7 | -12 | -18 |
| '98 March | -6 | -4 | -10 | -8 | -2 |
| '97 December | -39 | -41 | -35 | -28 | -53 |
| '97 September | -22 | -29 | -10 | -17 | -28 |
| '97 June | -42 | -41 | -41 | -39 | -46 |
| '97 February | -53 | -55 | -47 | -55 | -51 |
| '96 November | -44 | -43 | -44 | -41 | -48 |
| '96 October | -36 | -33 | -39 | -38 | -34 |