Fewer U.S. investors plan to increase their foreign allocations this year, according to a survey by PaineWebber Inc. and the Gallup Organization.
The survey found 26% of U.S. individual investors have international investments. Only 28% expect to increase these positions this year, compared with 39% last year. The poll questioned 1,002 investors randomly selected in March.
The majority of investors with international holdings (54%) plan to maintain their current levels of foreign securities.
Certain highly visible world events -- including the Asian crises -- seem to be taking their toll. Indeed, the percentage of investors who consider international funds highly risky jumped to 35% from 18% in September, when investors were last polled about risk. Perceptions that international stocks are risky increased to 39% from 22%.
Investors rated the U.S. market as having the lowest risk of the 11 geographical areas cited in the poll. In second place was Canada, followed by western Europe. In turn, the markets of Africa, Russia and the Middle East were seen as the riskiest.
Two international events -- the Asian crises and tensions with Iraq -- are seen as affecting the United States. A total of 78% believe the Asian crises pose the most serious threats to the U.S. financial markets, while 61% believe tensions with Iraq hurt the investment climate.
In contrast, 54% cited concerns about the health of Social Security, 45% pointed to allegations against the Clinton administration, and 38% cited turmoil in Bosnia, as negative influences.
