Investors’ confidence rose during the first quarter of 2012, according to a new report.
John Hancock Financial Services, a unit of Manulife Financial Corporation, Toronto, disclosed this finding in a new John Hancock Investor Sentiment Index, a quarterly measure of investors’ views on investment choices, life goals, economic outlook and confidence in these areas.
The index is derived from a quarterly poll of approximately 1,000 investors, and reflects the percentage of those who say they believe it is a “good” or “very good” time to invest, minus those who feel the opposite. The first quarter survey was conducted in late February of 2012.
Investor sentiment improved to +21 in the first quarter of this year, compared with a score of +15 in the fourth quarter of 2011, the most substantial increase since the Index was started in early 2011, the report says.
In a significant finding, more investors this past quarter believe they are in a better financial position today than they were two years ago (43% versus 33% in Q4 2011). Moreover, nearly 60% believe they will be in a better financial position looking ahead two years from now.
Fueling the improvement this past quarter was a rise in positive attitudes toward investing in stocks and balanced mutual funds. Investors report optimism about equities and foresee market growth.
The study says that more than half of investors are bullish on stocks (56%) and balanced mutual funds (54%). For those looking to invest in the market over the next six months, energy (55%), technology (53%) and healthcare companies (42%) lead the way.
Investors are feeling optimistic as well about retirement products, with 77% saying it is a good time to contribute to 401(k) plans or IRAs. Two-thirds say they are likely to invest in a 401(k) plan within the next 12 months.
Investors showed less confidence in fixed products. Nearly two-thirds believe it’s a bad time to be holding on to cash in the form of CDs, money market accounts and the like.
For bonds, the views were mixed: Nearly thirty percent think it is a good time to buy bonds and a similar percentage (26%) saying it is a bad time to invest in them.
“Economic indicators suggest the internal dynamics of the U.S. economy look pretty good right now, and investors appear to be in sync with that,” says John Hancock Chief Economist Bill Cheney in a prepared statement. “Their optimism for equities and less positive attitude towards fixed products show that investors are gaining confidence that the country is starting to pull out of its economic downturn. They are beginning to consider taking action by moving their money from the sidelines and into the market.”