By John Hancock Financial, Special for USDR
The John Hancock Investor Sentiment Index® fell in the third quarter of 2015 to a level not seen in a year, after reaching its highest point since inception in the second quarter of this year. Worries about a possible Fed hike in interest rates and China’s devaluation of its currency coincided with investors’ responding to the survey, helping drive down their optimism regarding stocks, bonds and balanced mutual funds compared to the previous three quarters.
The John Hancock Investor Sentiment Index score is now at +23. Confidence in investing in stocks declined to 51 percent from 60 percent in Q2 of 2015, in balanced mutual funds to 53 percent from 63 percent, and in bonds to 19 percent from 25 percent. However, investors remain positive about owning their own homes (70 percent) and also are positive on real estate investments (56 percent).
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. The second quarter 2015 survey was conducted during the middle two weeks of August.
“Despite the drop in sentiment from previous quarters, our survey revealed a key positive trend – which is that investors are staying the course when it comes to saving for retirement, with three-quarters of respondents saying it is a good time to be contributing to retirement plans,” noted Megan E. Greene, Chief Economist, John Hancock Asset Management. “Of those in the survey who have a 401(k) plan or other type of defined contribution retirement plan, 80 percent say they are currently contributing to the plan. Four in ten say it is a good time to invest in Target Date and Target Risk funds, which are primarily held in retirement plans.”
Investors stayed steadfast in their views of what types of investments are likely to perform strongly in the near future, though there is more uncertainty. Twenty percent say that blue chip stocks will perform best over the next six months, though this level is down from 29 percent in Q4 of 2014. Small cap stocks (16 percent) and emerging markets (11 percent) are other top choices.
Topping the list of investor concerns is worry about being able to afford nursing home or long-term care (58 percent), while 68 percent are concerned about being able to afford high quality healthcare. More than half are concerned that they will run out of money in retirement (55 percent). Just over a third are at least somewhat concerned about their ability to remain in their own home throughout retirement. One third express concern about the possibility of entering retirement with debt.
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 1,019 investors were surveyed from August 10th to August 21st, 2015. 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 3.1 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 C$883 billion (US$708 billion) as at June 30, 2015. 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. JohnHancock 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.
SOURCE John Hancock Financial