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Portfolio > Mutual Funds

Investor Sentiment Hits New Peak in Q1: John Hancock Survey

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Investors surveyed in mid-February expressed optimism about their prospects for the remainder of 2015, believing now was a “good” or “very good” time to invest.

Eighty-one percent of respondents to John Hancock’s investor sentiment survey, released Wednesday, said 2015 would be a good year for average investors, compared with 73% who said this in last year’s first quarter.

Investor sentiment rose to +28 in the first quarter, up from +23 a year ago. John Hancock said this was the highest level the index had reached since the survey’s inception five years ago.

“Three-quarters of those surveyed also said they are optimistic that the U.S. economy will be stronger two years from now,” Megan Greene, the chief economist at John Hancock Asset Management, said in a statement.

Most investors thought health care and technology companies would lead the market this year, while fewer respondents were bullish on the energy sector, Greene said.

As well, investors were more positive about real estate and home ownership and spending on travel and consumer items. They were also likelier to see now as a good time to switch jobs or start a new business.

The survey found that investors still thought that China would have the fastest-growing economy, though the country’s slowdown has eroded that sentiment compared with 2013 when this question was last asked, Greene said.

“Surprisingly, a greater share of investors (22%) chose the U.S. as the country they expect will have the fastest growth, compared with 8% who thought so in 2013.”

Sixty-two percent of respondents were positive on investing in stocks now. Sixty-one percent felt the same way about balanced mutual funds, and 59% about stock mutual funds.

Optimism about investment in exchange-traded funds also rose in the new survey, with 41% positive versus 35% a year ago.

Retirement investing was a major priority for investors surveyed, with 81% saying now was a good time to contribute to their 401(k) plans and IRAs. Forty-five percent were positive about investing in target-risk and target-date funds.

Some 20% of investors expected the rate of inflation to be 1% or lower two years from now, compared with only 2% who thought so in last year’s first quarter. Five percent expected the inflation rate to be 4% or higher in two years.

Forty-eight percent of investors expressed considerable concern about unrest in the Middle East, nearly double the share who were concerned a year ago. Investors were also still worried about political gridlock in the U.S. and about rising health care costs.

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