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John Hancock: investor confidence held steady in fourth quarter

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Investors’ confidence held steady in the fourth quarter of 2012, according to a new survey.

John Hancock Financial, Boston, disclosed this finding in its latest Investor Sentiment Index, which shows investor confidence at +18, compared to a score of +17 in the third quarter of last year.  Investor sentiment has remained at a relatively modest level over the last three quarters amid widespread economic and political concerns, the Index showed. 

Investors continue to have positive views toward equities, with roughly half (48 percent) saying it is a good time to invest in stocks, while their outlook for fixed income remains mixed, the survey indicates. Just over a quarter feel now is a good time to invest in bonds (27 percent), yet a similar share (30 percent) think it’s a bad time.Stock market growth is in the near future, according to more than half the investors polled.

They think the Dow Jones Industrial Average will be at or above 13,500 by the end of the third quarter of this year. Overall, investors think blue chip stocks (20 percent) are the type of investment with the most potential, with healthcare and energy as the likely best-performing sectors. Looking toward the New Year, investors revealed that three in ten (29 percent) plan to find ways to trim their household budget in 2013.

One in five said their top financial New Year’s resolution was to rebalance their investment portfolio, while 16 percent plan to create a will or estate plan. Learning more about investing and what they should be doing is the financial planning-related New Year’s resolution for ten percent of investors. 

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From a fun and leisure standpoint, more than a third of investors (36 percent) plan to take a vacation in 2013. One in seven (15 percent) plan to exercise or live a healthier lifestyle. Close to one in ten (nine percent) plan to enjoy life and be happy, while eight percent claim they do not make resolutions.

Only a few plan to save money, pay off debt, or try to reduce stress (each, three percent), the survey shows. Even fewer plan to spend less money or spend more time with family and friends (two percent each). 

When asked about their key concerns, nearly two out of three (63 percent) describe themselves as very concerned about political gridlock in Washington, DC. More than four in ten (45 percent) expressed concern leading up to the last minute fiscal cliff decisions.

The national debt (57 percent) and the cost of healthcare (58 percent) also continue to worry investors.  Inflation is a major concern as well. Twenty-six percent of survey respondents feel very concerned about inflation, with the share of investors who think that the rate of inflation will run at more than four percent two years from now increasing to 22 percent from 17 percent in Q3 of 2012.

The plurality of investors (44 percent), however, predicts inflation will remain in the three to three and a half percent range.