John Hancock Investor Sentiment Index Declines Even Though Optimism Remains In Second Quarter of 2011

BOSTON, July 8, 2011 /PRNewswire/ -- John Hancock Financial today announced the results of its quarterly measure of investors' views on a range of investment choices, life goals and economic outlook.  For the second quarter of 2011, the John Hancock Investor Sentiment Index score is +18, a four point decline from +22 recorded in the first quarter of 2011, which was the inaugural quarter for the Index.  

Majorities express concern about rising gasoline prices and healthcare costs, and just as many indicate they are concerned about the nation's balance sheet.  These worries appear to be the primary reason for the lower second quarter score compared with Q1 of 2011. At the same time, investors have retained their faith in the equity market and are optimistic about their personal financial situations.

However pressing economic worries may be, they do not appear to be standing in the way of Americans' summer vacation plans. Four out of five investors in the survey (82 percent) say they plan to take a vacation this summer, notably higher than the 73 percent who reported that they took a summer vacation in 2010. Likewise, six in ten say they expect to spend the same amount of money on their vacations this year, while twenty percent say they expect to spend more. More women than men say they will spend less on this year's vacation.

"While investors continue to keep a wary eye on domestic and global economic issues, our survey suggests that investor confidence persists, although its momentum appears to have slowed somewhat in the second quarter," said Bill Cheney, Chief Economist for John Hancock."

Among John Hancock's key findings for Q2:

• Investors continue to demonstrate a reserved confidence in the stock market, as more than half of those surveyed believe that it is a good time or a very good time to be investing in equities (58 percent say this), in stock mutual funds (53 percent), and in balanced mutual funds combining stocks and fixed income instruments (54 percent). Furthermore, investors plan on investing in equities (75 percent), or in stock mutual funds (73 percent) in the 12 months ahead. These observations are consistent with first quarter findings.
• Investors are the most bullish on blue chip stocks (19 percent) in the near-term, compared with other investments. Sixteen percent think emerging markets will out-perform over the next six months. Roughly one in seven identified gold as the investment most likely to perform well. The most promising areas of the stock market, investors say, are the energy and technology sectors, along with healthcare.
• Even more so than in the first quarter of 2011, investors believe now is a bad time to be holding on to cash. In addition, very few believe it is a good time to be investing in bonds (only 23 percent think it is a good time to do so), or in fixed income mutual funds (25 percent). The more negative views toward bonds and cash are largely responsible for the decrease in the overall Index score.
• Several of the economic issues facing the U.S. are giving investors pause. Sixty-two percent describe themselves as very concerned about oil and gas prices, while 61 percent worry about the national debt, and 59 percent about the rising costs of healthcare. More than four in ten are chiefly worried about the unemployment rate.
• Meanwhile, investors' perceptions of their own financial well-being appears to be holding steady. Consistent with first quarter findings, 49 percent say they are better off today than they were two years ago, while 58 percent say they believe they will be in a better financial position in two more years.
• With most of those surveyed describing themselves as "long-term investors," 28 percent said their top goal was planning for retirement. However, among non-retirees, the share citing retirement savings as their main focus rises to 35 percent. Consistent with last quarter, four out of five investors believe it is a good time to allocate money to retirement accounts such as 401(k) plans or IRAs.

Summer Vacation Outlook

Gasoline prices of $4.00 per gallon or higher by July were the prediction of 75 percent of respondents. Overall, 60 percent indicated that gas prices had some impact on their summer travel plans, and women are more likely than men to say that gas prices have affected their travel plans. Among those not vacationing this summer, nearly two in ten (18 percent) say they are doing without because they cannot afford to or are afraid to spend the money on a trip. Only five percent say they cannot get the time off from work, or that they are concerned they may lose their jobs if they do go away on vacation.

About the John Hancock Investor Sentiment Survey

John Hancock's Investor Sentiment Survey is a quarterly poll of investors, conducted by independent research firm Mathew Greenwald & Associates.  A total of 1,146 investors were surveyed using an online research panel between May 9 and May 15, 2011.  To qualify, respondents were required to participate 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 2.95 percentage points at the 95 percent confidence level.  The John Hancock Investor Sentiment Index is based on consumer assessments of whether this is a good time or bad time to put money into six different types of investments.

About John Hancock Financial and Manulife Financial Corporation

John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. 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. For more than 120 years, clients have looked to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Funds under management by Manulife Financial and its subsidiaries were Cdn$478 billion (US$492 billion) as of March 31, 2011. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial may be found on the Internet at www.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 www.johnhancock.com.

SOURCE John Hancock Financial