BOSTON, April 4, 2017 /PRNewswire/ -- Investor sentiment rose during the second half of 2016 and into the start of 2017, buoyed by investors' confidence in the improving stock market, according to the John Hancock Investor Sentiment Survey. The John Hancock Investor Sentiment Index® score for Q1 2017 was +29, four points higher than when the survey was last conducted in Q2 of 2016, and ten points higher than one year ago in the first quarter of 2016.
The John Hancock Investor Sentiment Index® reflects the percentage of investors who say they believe it is a "good" or "very good" time to invest, minus those who feel the opposite.
"Investors' confidence in equity market investing is significantly higher than in the last four reported quarters of the Survey," said Frances Donald, economist with John Hancock. "The DJIA is approximately 3,000 points higher now than it was at this time last year, and investors seem to be taking their cue from that."
Confidence in putting money into stock mutual funds also increased significantly over the past year, with 55 percent of investors saying it was a good or very good time to choose equity funds versus 38 percent in Q1 of 2016 who felt that way. Exchange Traded Funds (ETFs) also rose in investors' estimation, with 39 percent expressing confidence compared with 24 percent one year ago. Positive attitudes extended to investing in home ownership too, as well as other real estate investments.
Saving for retirement continues to be a priority for non-retired investors, and confidence in investing in 401(k)s, IRAs, and target date funds also saw an upswing in sentiment. For example, 78 percent of investors thought it was a good or very good time to dedicate funds to 401(k) accounts in Q1 of 2017 compared to 68 percent who felt that way in Q1 of 2016.
"Largely due to the stability of the stock market, investors believe it is now a good time to make significant changes to their portfolios, the survey tells us," added Ms. Donald. "This quarter, investors are more likely than in past quarters to believe that the United States will have the fastest economic growth among other major economies, and that 2017 will be a positive year for the average American investor. Many say that job creation is what's most needed to achieve economic success."
To be sure, investors report plenty of concerns in the John Hancock survey. Topping the list is the cost of health care, with 56 percent expressing great concern, and a third saying they are greatly concerned over potential changes to the Affordable Care Act. Forty-two percent are very concerned about global terrorism. Investors are concerned, though less so than in previous quarters, about the level of the national debt, and interest rates. Fewer are concerned about the unemployment rate, and more investors feel it is now a good time to start a business, switch jobs, or retire.
Half of investors (51 percent) report being in a better financial position now compared to two years ago, significantly more than the share who felt this way one year ago (41 percent). Consistent with prior surveys, nearly half believe they will be in a better financial position two years in the future (48 percent).
About the John Hancock Investor Sentiment Survey
John Hancock's Investor Sentiment Survey is a 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 their attitudes toward specific financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,017 investors were surveyed from February 6th to February 17th, 2017. 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 3.14 percentage points at the 95 percent confidence level. Due to rounding and missing categories, numbers presented may not always total to 100 percent.
About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Assets under management and administration by Manulife and its subsidiaries were $977 billion (US $728 billion) as at December 31, 2016. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife 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, investments, 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.
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SOURCE John Hancock Financial