US investors see Asia as the region to be in

WASHINGTON: Close to half of affluent US investors see the stock
market as a buy, with energy as the industry and Asia as the region to
be in. According to a poll of investors, 44% of those with household
incomes of $1,00,000 or more viewed it as a good time to buy stocks,
versus 15% who said it isn't. The benchmark Standard & Poor's 500
index has declined 10% from its record high in October.

"Any time prices come down, that's typically been the time to buy,"
said Phyllis Hamm, 59, a survey participant who works at a non-profit
group in Raleigh, North Carolina. The poll results signal some
Americans may be ready to shift part of the $3.5 trillion parked in
money market funds into equities.

The confidence also indicates they anticipate limited spillover among
stocks from the financial crisis that has led to $335 billion of
losses and writedowns in that industry.

"There's plenty of ammunition out there for an equity rally later this
year," said Joseph Quinlan, chief market strategist in New York for
the investment management unit of Bank of America, which oversees $643
billion in client assets.

Forty percent of respondents singled out energy as the best place to
put their money over the next 12 months, followed by health care and
drugs, at 30%, technology, at 22%, and financial services, with 15%.
Investors could choose more than one industry.

Only 4% of investors surveyed last year said financial services was
the best place to invest. Health care came in first in 2007, followed
by energy and technology. "If you're a contrarian, financial services
might be the sector with the opportunities," said Paul Engle, a 57-
year-old consultant in Clarksville, Maryland. "I don't believe large
financial institutions are in any risk of going out of business."

Financial stocks have been hammered by the credit crunch that was
sparked by rising defaults on subprime mortgages. The S&P 500
financial index has lost about 30% in the past year, to 351.26.

Asia came out on top when well-off investors were asked which region
offers the best returns over the next 12 months — the same result as
in last year's poll. The US slipped from second to third, slightly
lagging behind emerging markets.

"International stocks may be more reliable investments than those
here, as reflected by the weakness of the dollar," said Lesia
Dropulic, a 45-year-old doctor in Ellicott City, Maryland.

Asian currencies have soared against the dollar in recent years,
fuelled by rising trade surpluses and investments from abroad. China's
yuan has advanced 18% in the past three years, Singapore's dollar is
up 21% and the Thai baht has gained 23%. The dollar has slumped 18%
versus the euro over that period.

The poll of 2,208 adults nationwide included 607 investors with
household incomes of at least $100,000 and was conducted May 1 to May
8. The group has a margin of sampling error of plus or minus 4
percentage points.

While investors said it's a good time to buy stocks, the survey also
indicated that they have become more guarded about allocating their
own funds. 29% of those surveyed described themselves as aggressive,
pro-growth investors, down from 36% last year.

Given a hypothetical $1 million to invest, the investors chose mutual
funds as the best place to put their money, replacing real estate,
which held the top spot in last year's poll. Stocks came in third both
years.
"You need to be diversified," said Scotty Reiss, a 44-year-old, stay-
at-home mother in Cos Cob, Connecticut. "You can't put all your eggs
in one basket."

While 96% of affluent investors described themselves as financially
secure, others who took part in the poll were not as confident.
Overall, 57% said they were secure — down from 68% last year and the
lowest level since 1992.
The well-off, though, scaled back their financial expectations. Nearly
half anticipated that their investments will earn less this year than
last. That compares with 28% in the 2007 poll.

One-third expected the value of their homes to stagnate or fall over
the next three years. That's also a turnaround from last year, when
only 4% were so pessimistic.

"There's a lot of sobriety out there," says Robert Stovall, managing
director and global strategist for Wood Asset Management, which runs
more than $1 billion in investments for its clients. "It's probably a
pretty good time to buy shares."