John Hancock Investor Sentiment Index® Reaches New High in 2013's Second Quarter
- Investors' positive views of stocks, balanced mutual funds, their own homes and real estate helped drive Index score to +26
- More than half say they are financially better off than they were two years ago, and optimism for the future remains high
- Forty percent are very worried about potential changes to Social Security and Medicare
BOSTON, July 2, 2013 /PRNewswire/ -- The John Hancock Investor Sentiment Index® rose two points to +26 in the second quarter of 2013, surpassing last quarter's all-time high and continuing an upward trend that began in the fourth quarter of 2012.
Positive attitudes toward investing in stocks persisted in the second quarter, with 62 percent saying that now is a good time to invest in them. The enthusiasm for equities is sharply higher than a year ago, when only 48 percent of investors were positive on stocks in 2012's second quarter. Likewise, investors are upbeat about real estate (63 percent, up from 59 percent in Q2 of 2012) and about their own home as an investment (67 percent, up significantly from 60 percent in Q2 of 2012).
Investors continue to shun bonds, with only 23 percent thinking it is a good time to invest in them, significantly lower than one year ago when 27 percent felt that way. Investors generally feel now is a bad time to be holding onto cash (64 percent).
Bill Cheney, John Hancock's Chief Economist, commented: "Amid steady gains in U.S. equity markets, investors are continuing to gain confidence in longer-term investing in companies and in less liquid investments such as real estate. Perceptions of their financial position also remain on an upward trend, with more than half (53 percent) of investors saying their current financial position is better than it was two years ago, a significant increase from 42 percent who felt that way in the second quarter of 2012. And about half (49 percent) continue to believe that two years from now they will be in even better shape financially."
Attitudes toward saving and investing remain remarkably high. Eight in ten investors feel than now is a good time to contribute to 401(k) plans (81 percent) and IRAs (78 percent), while 52 percent are positive on 529 College Savings Plans.
Investors are generally optimistic about the markets. A quarter of investors surveyed (26 percent) think that blue chip stocks will perform the best over the next six months, a significantly higher percentage than one year ago (21 percent in Q2 2012). One in five (20 percent) think that small cap stocks will do the best, whereas only 16 percent thought so in the second quarter of last year.
Overall for investors, top financial priorities are managing or maintaining their current lifestyle (30 percent) and saving for retirement (29 percent). Of those surveyed who are currently working, 41 percent say saving for retirement is their chief priority.
Forty-two percent of investors are very concerned about potential changes to Social Security and Medicare, a significant increase over Q1 of 2013 (36 percent). Also among the issues that investors worry about are the cost of healthcare (64 percent cite this as their top concern) and political gridlock in Washington, DC (57 percent). Worries about the price tag on healthcare grew significantly from the first quarter of this year, when 59 percent said they were concerned about it. Concerns are diminishing over the national debt (51 percent say it is a top concern now, versus 59 percent one year ago), oil and gas prices (37 percent now versus 47 percent one year ago), and the unemployment rate (32 percent now versus 43 percent one year ago).
About the John Hancock Investor Sentiment Survey
John Hancock's Investor Sentiment Survey is a quarterly poll of affluent investors. The survey measures investors' feelings about the current economic climate and their evaluations of what represents a good or bad investment given the current environment. The poll also asks consumers about their confidence in reaching key financial goals and likelihood of purchasing financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,078 investors were surveyed from May 13th to May 24th, 2013. Respondents were selected from among members of Research Now's online research panel. To qualify, respondents were required to participate at least to some extent in their household's financial decision-making process, have a household income of at least $75,000, and assets of $100,000 or more. The data were weighted by age and education to reflect the population of Americans matching the survey's qualification requirements. In a similarly-sized random sample survey, the margin of error would be plus or minus 3.05 percentage points at the 95% confidence level. Due to rounding and missing categories, numbers presented may not always total to 100%.
About John Hancock Financial and Manulife Financial
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife Financial in Canada and Asia, and primarily as John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$555 billion (US$547 billion) as at March 31, 2013. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, mutual funds, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.
SOURCE John Hancock Financial