Investor optimism in March rose to its highest level since November 2000, according to the Index of Investor Optimism, a joint effort of UBS and the Gallup Organization.

Currently at 121, the overall index increased 29 points from 92 in February. Short-term expectations, over the next 12 months, jumped to 12.8% in March from 9.5% last month. The increase was most pronounced among investors with $10,000 to $100,000 in investment assets, with expectations rising dramatically to 14.2% this month from 9.9% in February. Among investors with more than $100,000 in assets, expectations increased to 10.7% in March from 8.8% last month.

Overall, investors are more bullish about the financial markets, with 71% saying now is a good time to invest, up from 67% in February. Indeed, 60% of those surveyed in March express optimism about the performance of the stock market over the next year, an increase of 10 percentage points over last month.

According to the index, 65% agree the worst of the U.S. recession is behind them, compared with 57% last month. The number of investors who say the economy has not yet hit bottom declined significantly to 31% this month from 41% in February.

In March, investors were polled about the fallout from the Enron bankruptcy and the questionable accounting practices that led to the company’s demise. The vast majority of those surveyed, 89%, believe the accounting practices issue is a serious problem for U.S. businesses. Three-quarters of people surveyed favour stricter accounting regulations by the government; 87% favour requiring companies to produce consolidated balance sheets; 63% support prohibiting an accounting firm from acting as both a consultant and the auditor; and 62% believe there should be increased funding and authority for the Securities Exchange Commission to provide stricter oversight.

The biggest risks that investors see include: the issue of questionable accounting practices, the conflict between the Israelis and Palestinians, the general economic environment in the U.S., Japan’s economic problems, and the war on terrorism.

The survey was conducted from March 1 to March 14. The sampling error in the results is plus or minus three percentage points.