The latest UBS/Gallup Index of Investor Optimism came in down just one point. This follows a 13 point decline from January to February.

Half of all investors responded that they are optimistic about U.S. economic growth, and more than half are optimistic about the performance of the stock market, with a total of 62% believing that now is a good time to invest in the financial markets.

Despite the moderate optimism, investors see certain key issues as potentially harmful to the investment climate in the U.S. Investors continue to see the price of energy as the most harmful influence on the U.S. investment climate, among 10 items measured in the poll, 69% say it is hurting the investment climate a lot and another 22% say it is hurting a little, a sentiment that has essentially held steady since last November.

Over half of investors believe that the federal budget deficit, and close to half, 48%, cite the Iraq war, as hurting the investment climate a lot. Additionally, the outsourcing of U.S. jobs to foreign countries continues to be cited as a significant concern to investors; 53% of investors see job outsourcing as hurting the U.S. investment climate a lot. However, this represents an 11 point decline since November 2005, when 64% of respondents held that view.

“Even with rising stock prices and an improving job market, investors remain cautious about their outlook for the economy as they look at current economic trends and political issues around the world,” said Robin Miranda, associate strategist, UBS Wealth Management Research.

The monthly poll of investors also found somewhat negative reactions to the issue of illegal immigration in the U.S. Over half of all investors identified illegal immigration as having a harmful impact on the U.S. economy.

The index survey was conducted March 1-16. For this study, the American investor is defined as any person who is head of a household or a spouse in any household with total savings and investments of $10,000 or more. The sampling error in the results is plus or minus four percentage points.