Investor Sentiment Jumps Six Points in 2016's Second Quarter, Following Three Quarterly Declines
- Uptick in sentiment mostly due to a return of positive attitudes toward investing in stocks and balanced mutual funds
- While up, investors' confidence level is lower than one year ago
BOSTON, July 5, 2016 /PRNewswire/ -- Investor sentiment increased in the second quarter of 2016 as measured by the John Hancock Investor Sentiment Index, rising to +25 from +19 in the first quarter of this year. Sentiment had reached an all-time high of +29 one year ago – in the second quarter of 2015 – which was then followed by three consecutive quarterly declines.
Investors have regained some confidence in stock market investing, with 45 percent saying it is a good or very good time to buy stocks, but the confidence level is significantly lower compared with one year ago when 60 percent said so.
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.
Seven in ten investors surveyed expressed positive feelings about investing in their homes in the second quarter of 2016, while 55 percent felt that way about other real estate investments. Only one quarter of investors feel now is a good time to invest in bonds, with just as many (24 percent) saying it is a bad time to buy bonds. About half (49 percent) of investors possess a negative attitude toward holding cash, while one year ago 61 percent felt this way, suggesting that investors may have become selectively more conservative.
"One positive note is that investors in our survey clearly favor retirement investing, via 401(k) plans and IRAs, with nearly three-quarters saying this is a good time to direct money toward those investments," said Frances Donald, economist with John Hancock. "This sentiment has grown in particular since the prior quarter – Q1 of 2016 – when 68 percent were positive on retirement investing."
"Regarding their personal financial health, half of investors surveyed said they were in a better financial position compared with two years ago. This is an increase from the first quarter of 2016, when only 41 percent felt this way. But it represents a decrease from one year ago, when 57 percent said their financial picture was an improvement over the prior two years," she added.
Among the list of things that keep investors up at night, the cost of healthcare tops the list, with 59 percent saying they are "very concerned." A majority are concerned about political gridlock in Washington (52 percent), while close to half are very concerned about the level of the national debt (46 percent).
Concern remains low about interest rates and inflation. Only one in five (21 percent) investors expresses concern over interest rates, consistent with the levels of 19-20 percent over the previous four quarters. About 19 percent of investors are concerned about inflation, again consistent with investor sentiment over the four previous periods, hovering between 16-19 percent.
The best investment opportunities over the next six months, investors say, will be found among technology companies (60 percent said this), healthcare (53 percent) and energy (39 percent).
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 their attitudes toward specific financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,011 investors were surveyed from May 9th to May 20th, 2016. 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. Demographic information and other respondent characteristics are available upon request. 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 3.15 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 $904 billion (US $697 billion) as at March 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
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