Feel Like Shopping?
By Amy Wilson

(MONEY Magazine) – My 93-year-old grandfather has recently taken to keeping a bottle of Champagne in his refrigerator at all times. He says he's sure something worth celebrating will happen any day now--and he wouldn't want to wait for the bubbly to chill.

Such optimism seems a rare thing these days. The two major measures of U.S. consumer confidence--the University of Michigan's index of consumer sentiment and the Conference Board's consumer confidence index--dropped again in September. Since it's the consumer who has kept our economy out of a full-on recession, this is worrying.

Some investing pros obsess over confidence, but let's remember that these indexes are just opinion polls. (Despite wobbly confidence, actual consumer spending has risen for 11 of the past 12 months.) Both essentially ask two gut-check questions: 1) How are we doing? and 2) How do you think we'll be doing in the future? Michigan, which polls 500 people by phone, says Americans grew only slightly gloomier in September, while the Conference Board says its 3,500 mail-in survey respondents are significantly more downbeat than in August.

What makes a consumer confident? A job, to start. Yet with half of all households invested in the stock market, a rising Dow ought to improve confidence too. Meanwhile, a new study in the Journal of Financial Planning shows that when individual investors are confident, they allocate more assets to stocks, which should help boost the market. So which comes first, the confident chicken or the stock market egg?

When Wall Street looks at confidence, perhaps it is only looking back at itself. If so, investors' best move may be to join my grandfather in a toast...to better days ahead. --AMY WILSON