The Dow and the Nasdaq are still well below their boom-time highs, but U.S. investors are feeling more upbeat than they have for over a year about prospects for the stock market and economy. That is the message from the latest Index of Investor Optimism, a nationwide consumer survey conducted by the Gallup Organization and UBS Americas Inc.
Based on a random monthly survey of 1,001 investors nationwide, the index hit 115 in January, up 31% from its level of 88 in December. While the reading is the highest for the index since November 2000, it remains below its starting point in the fall of 1996.
The survey highlighted a wide gap in expectations of stock-market returns between veteran equity investors and those who jumped in during the bull-market years. Investors with more than 20 years of experience said they expected 12-month equity returns to reach 7.8%, up from 6.8% in December, but still around what stocks have delivered, on average, since the 1920s. But investors who entered the market in the last five years said they expect returns to reach 11.7% in the coming year, up from 9.2% in December.