Investor Sentiment Shows Slight Dip in 2012's Second Quarter

- John Hancock Investor Sentiment Index™ remains in positive territory; declines slightly to +19 from +21 in Q1 2012 due to less optimistic views on equities.

- More are concerned about Eurozone debt; worry diminishes on unrest in Middle East.

Jul 02, 2012, 10:00 ET from John Hancock Financial

BOSTON, July 2, 2012 /PRNewswire/ -- Investors' confidence softened somewhat in the second quarter of 2012, according to the John Hancock Investor Sentiment Index™, released today by John Hancock Financial Services. Investor sentiment declined by just two points to +19 in the second quarter compared with a score of +21 in the first quarter of this year. The shift was attributed to a drop in positive attitudes toward investing in equities. Fewer than half of investors surveyed are bullish on stocks (48 percent compared to 56 percent who were bullish in Q1 2012).

(Photo:  http://photos.prnewswire.com/prnh/20120702/NE33656-INFO )

The Index shows that investors overall feel almost the same about investing this year compared to last year. In the second quarter of 2011, the Index score was +18.

Investors' views on most types of investments remain unchanged in the second quarter of 2012 from the year's first quarter. Attitudes toward balanced mutual funds were similar to the prior quarter, with 52 percent now saying that it is a good time to be investing in balanced mutual funds versus 54 percent in the first quarter.  Also unchanged were investors' mixed views on bonds, with 27 percent saying it was a good time to invest in bonds (28 percent in prior quarter) while 25 percent think it is a bad time (26 percent said it was a bad time in the first quarter).

Investing for retirement remains popular. Nearly eight in ten investors feel that now is a good time to be investing in 401(k) plans (78 percent) and three-quarters have similar feelings about IRAs (74 percent).  Investors felt about the same a year ago, with 80 percent saying the second quarter of 2011 was a good time to be investing in 401(k) plans, while 79 percent said it was a good time for IRA investing.

Blue chip stocks will perform the best over the next six months of this year, say nearly twenty percent of investors. Small cap stocks (picked by 16 percent of investors to perform best) were next, followed by emerging market securities (14 percent). Only four percent of investors believe that international equities will perform well, with even fewer optimistic about government bonds (two percent). Investors believe that energy, technology and healthcare companies will provide the best investment opportunities in the next six months. Investors are more inclined than in the previous quarter to cite healthcare as a leading sector (47 percent compared to 42 percent last quarter.

"Having been through considerable volatility in the past few years, investors seem to be saying they aren't terribly fazed by economic trends of the past quarter," said Bill Cheney, John Hancock's Chief Economist. "It looks as though reasonably healthy sentiment is prevailing, with investors focused on meeting their financial goals and investing for retirement. Ninety-three percent of the respondents in our survey describe themselves as long-term investors, and 91 percent say they are savings-oriented."

The John Hancock Investor Sentiment Index™ is a quarterly measure of investors' views on a range of investment choices, life goals, and economic outlook, as well as their confidence in these areas.  The John Hancock Investor Sentiment Index™ is derived from a quarterly poll of approximately 1,000 investors, and reflects the percentage of those who say they believe it is a "good" or "very good" time to invest, minus those who feel the opposite. The second quarter survey was conducted in mid-May of 2012.

Among the findings for Q2 2012:

  • Concern about the unrest in the Middle East has decreased significantly from the previous quarter (33 percent versus 40 percent in Q1 2012). However, concern over the Eurozone debt problems has increased significantly (34 percent versus 29 percent last quarter)
  • Investors believe they are in a better financial position today compared with two years ago (42 percent). Half (50 percent) believe that, in two years, they again will be in a better financial position. This is a significant decrease from both the previous quarter (57 percent in Q1 2012) and the second quarter of 2011 (58 percent).
  • Investors mention the value of their investments decreasing and being able to save enough retirement as their biggest personal financial concerns.
  • Investors are highly confident in their ability to attain many lifetime financial goals, with paying off a mortgage (94 percent) and maintaining a financially secure retirement (90 percent) topping the list.

About the John Hancock Investor Sentiment Survey

John Hancock's Investor Sentiment Survey is a quarterly poll of 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 Mathew Greenwald & Associates.  A total of 1,011 investors were surveyed May 14 to May 25, 2012. 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.

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 Financial Corporation

John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. In 2012, John Hancock celebrates 150 years of serving clients across the United States, while Manulife celebrates its 125th anniversary. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation 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$512 billion (US$512 billion) as at March 31, 2012.  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 a broad range of financial products and services, including life insurance, fixed and variable annuities, fixed products, 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



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