International investors are more upbeat about the global economytoday than at any time in almost five years, buoyed by the U.S.-ledrevival of industrial nations, according to the Bloomberg GlobalPoll.

On the eve of the World Economic Forum's annual meeting inDavos, Switzerland, 59 percent of Bloomberg subscribers surveyedlast week said the economic outlook is improving. That's up from 33percent in November and marks the most optimistic result since thepoll began in July 2009.

Strength in the richest economies was cited as the main reasonfor confidence by almost two-thirds of the 66 percent who said theywere more positive than a year ago. While the Standard & Poor's500 Index has already risen about 24 percent in the past year, morethan half of respondents identified stocks as the asset of choice for 2014 as concern about assetbubbles eased.

“Developed countries are playing by far the most important partof the recovery in confidence, in markets, and in the economy,”said Wilhelm Schroeder, 54, a poll participant and managingdirector of Schroeder Equities GmbH in Munich. “Without doubt,confidence is the single most important determinant forgrowth.”

The enthusiastic tone is set to be reinforced when more than2,500 leaders of finance, business, and government gather startingtomorrow in the Swiss Alps. The Davos meetings of recent memoryhave been overshadowed by crises ranging from the recession of 2009to subsequent fears of a euro-area break-up. Even a year ago, therewere qualms about the potential for a fiscal-policy error in theU.S. or a hard landing for China's economy.

“The mood is most likely better and positive,” said NourielRoubini, chairman of Roubini Global Economics LLC in New York, whoused the Davos conference of 2007 to warn of impending economicwoes. “That reflects the improved strength in the global economyand financial markets.”

The change in mood sees equities favored over fixed income, with53 percent of those surveyed saying stocks will offer the bestreturn in the coming year, the most since May. Just 3 percentpicked bonds and 39 percent said they would have the worst returns.Real estate was the second most popular bet, with the backing of 16percent.

Attitude Shift

The poll also underscores the shift in attitude back towardadvanced economies, five years since they were roiled by thefinancial crisis and recession. Now it is the emerging markets, which propped up the world amid theslump, causing concern.

Seventy-two percent in the survey said the U.S. economy isimproving, up from 53 percent a year ago. Forty nine percent saidthe same of the Eurozone, a tripling since last January and themost since the question was first asked in September 2011.Forty-eight percent said Japan is strengthening.

By contrast, just 13 percent of those surveyed said China'seconomy is improving, with 36 percent saying it is deteriorating,although almost half said it's stable. On Brazil, 44 percent saidits economy is fading.

China's slowing economy also emerged as the biggest concernamong investors, with a third of those polled identifying it as theworld's major risk, up from 26 percent in November. Politicalgridlock in Washington over U.S. fiscal policy, the biggest worrytwo months ago, was viewed as the main threat by only 8 percentthis time.

“There has been an alarming deceleration in the emerging world,”said Nariman Behravesh, a Davos delegate and chief economist at IHSInc. in Lexington, Massachusetts. He estimates developing economieswill contribute the least to global growth this year since2010.

The rebound in developed economies was rubber-stamped today whenthe International Monetary Fund raised its forecast for globaleconomic growth this year to 3.7 percent from the 3.6 percent itpredicted in October.

That's not stopped Managing Director Christine Lagarde, who willalso be in Davos, from calling the recovery “feeble” and sayingglobal growth remains below its long-term trend of about 4 percent.She's also urged policy makers to fight the “ogre” ofdeflation.

Money looks likely to follow growth, according to the BloombergGlobal Poll. Forty-six percent said the U.S. will be among the mostattractive investment destinations this year. Forty percent pointedto the European Union, the most since the question was first askedin October 2009.

Worst Opportunities

Thirty-three percent identified Brazil as likely to provide someof the worst opportunities, while 29 percent named China and 27percent Russia.

The increased embracing of risk is fanning some concerns thatasset bubbles may build, albeit less so than in November's survey.Fourteen percent said stocks are in a bubble and 42 percent saidthey are approaching one, down from 20 percent and 45 percent inNovember.

Thirty-eight percent said Internet and social networking stocksare in a bubble, down from 49 percent. Thirty-five percent said thesame of London house prices, a decline from 41 percent. More thanhalf said Treasuries are not displaying signs of beingovervalued.

Some Davos attendees are already worried markets are showingsigns of exuberance unjustified by the economic recovery.

“We're getting a little optimistic,” former U.S. TreasurySecretary Lawrence Summers said in a Jan. 4 interview. He haswarned advanced economies may face a period of “secular stagnation”that even zero interest rates can't reverse.

The renewed expansion may nevertheless be a reason why 37percent said the trend in globalization is accelerating. About aquarter each said it is slowing or stalling, and 5 percent saidit's in reversal.

Asked how they viewed various policy makers, 71 percent ofrespondents said they regard European Central Bank President MarioDraghi favorably and 60 percent said the same of Bank of EnglandGovernor Mark Carney.

The poll of 477 investors, analysts, and traders who areBloomberg subscribers was conducted on Jan 16-17 by Selzer &Co., a Des Moines, Iowa-based firm. It has a margin of error ofplus or minus 4.5 percentage points.

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