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Portfolio > Economy & Markets > Stocks

Investor Sentiment Hit Two-Year Low in Q4: John Hancock

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Global equity market volatility and expectations in December that the Federal Reserve would end historically low interest rates appear to have tempered investor optimism in the fourth quarter, John Hancock reported Monday.

John Hancock’s investor sentiment index fell to +22 in the fourth quarter, down one point from the previous quarter and matching a low last reached in the third quarter of 2013. The quarterly poll reflects the percentage of affluent investors who say they believe it is a “good” or “very good” time to invest, minus those who feel the opposite.

Greenwald & Associates conducted the online survey of 1,018 investors in mid-November.

Fifty-three percent of respondents cited unrest in the Middle East as the global issue that worried them most. John Hancock said this finding was significantly higher than one year ago when 41% expressed this concern, and was likely due to terror attacks in Paris, which occurred while the survey was underway.

“Confidence in investing in stocks has decreased to 49% this quarter from 60% one year ago, and we saw a similar decline in optimism toward investing in balanced mutual funds, which incorporate stocks and bonds, a drop to 52% from 58% one year ago,” Megan Greene, chief economist at John Hancock Asset Management, said in a statement.

Greene noted, however, that 66% of investors were still positive about investing in their own homes, and 56% were positive about real estate investments in general. “Another piece of good news is that investors continue to stay the course with retirement savings, with nearly eight in ten investors saying now is a good time to contribute to 401(k) plans and IRAs.”

Among top-of-mind worrisome issues for investors, 58% ranked the cost of health care their main concern, up from 55% in the third quarter. 

Oil and gas prices, which greatly concerned 24% of investors in the second quarter, declined as a worry to 13% of those surveyed. Survey respondents expected technology and health care companies to provide the best investment opportunities in the next six months.

Twenty percent of investors, the largest share of those polled, thought blue chip stocks would perform the best over the next six months. This compared with 29% in the 2014 fourth quarter, suggesting, John Hancock said, that uncertainty had grown over the past 12 months.

In the new survey, 44% of investors said they were in a better financial position now compared with two years ago — significantly lower than in last year’s fourth quarter when 50% said so, and from 2015’s third quarter when the figure was 52%. Forty-nine percent of respondents said they expected to be better off financially two years from now, the same as in the 2014 fourth quarter.


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