Investor expectations are at highs never before seen, according to an index on investor expectations managed jointly for the past 20 years by the Gallup Organization of Princeton, N.J. and PaineWebber of New York.

The average investor expects the market to rise 15.3 percent in 2000 and for his own mutual fund or stock portfolio to surpass that by 3.1 percentage points, to earn a record 18.4 percent in the next 12 months, according to the index.

Gallup and PaineWebber conducted their study on investor optimism by interviewing 1,010 investors with savings of at least $10,000 each between Dec. 1 and Dec. 16. The organizations allow for a margin of error of plus or minus three percent.

The investor optimism index itself rose to 167 in December, up 35 points from 132 in November, according to PaineWebber.

"Our concern is that the 81 percent increase in the Nasdaq index this year has been driven by the performance of relatively few companies, rather than a broad number of stocks. In that context, sustained returns in the high teens may be unrealistic for many investors, given that historic returns are approximately 10 percent," said Mark Sutton, president of PaineWebber's private client group, in a statement.

In the past year, individuals have not increased from 15 percent, the amount of their salaries they set aside for investing, but more people are saving - currently 64 percent - up from 61 percent in June 1998, according to the company.

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