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SOURCE John Hancock Financial
- Decline due in part to increasingly negative views toward investing in equities
- Nearly three-quarters of investors report participating in a workplace retirement savings plan; Target Date and Target Risk funds remain popular options
- While half say they are in a better financial position compared with two years ago, many express concern about affording health care now and in retirement
BOSTON, Oct. 1, 2013 /PRNewswire/ -- The John Hancock Investor Sentiment Index® dropped six points in the third quarter of 2013, to +20 from its record high of +26 in this year's second quarter, partly due to investors' increasingly negative views toward investing in stocks. While the Index score reached its lowest point of the year this quarter, it is still three points higher than it was in the third quarter of 2012.
Significantly fewer investors (55 percent) said now is a good time to invest in stocks, compared with 62 percent who thought stocks were attractive in Q2 of 2013. Bonds did not have much appeal either, with only 18 percent of investors thinking it is a good time to invest in them, compared with 23 percent in the prior quarter.
Positive attitudes persist, however, toward home ownership, with two-thirds of investors still thinking that now is a good time to invest in their own home.
Investors continue to save for the long term and to view that activity in a positive light. Nearly three quarters say they are saving for retirement through a workplace retirement plan, and just as many are saving on their own. Eighty percent of investors said that now is a good time to be investing in their 401(k) plans and IRAs; this is a significant jump from last year when 73 percent thought so.
When available to investors in their 401(k) plans, Target Date funds or Target Risk funds are popular options, with nearly 60 percent choosing them. Investors said the main reason for investing in a Target Date fund is "that it is 'easy,' [they don't] have to think about it." The main reasons cited for choosing a Target Risk fund are "diversification," and "asset allocation based on your risk tolerance."
Half of investors report that their current financial position is better than it was two years ago. They continue to express confidence about the future, with half also stating that they believe they will be in a better financial picture two years in the future.
"While they are saving and investing and feeling relatively optimistic about their present financial situation, investors indicated they are worried about the future and their retirements. More than half are very concerned about rising health care costs (55 percent), and a third report being very concerned about changes to Social Security and/or Medicare (34 percent)," said Bill Cheney, John Hancock's Chief Economist.
"Investors are worried about being able to afford high quality health care in retirement (71 percent), and many mention that they are at least somewhat concerned about being able to afford a nursing home or long-term care if needed (60 percent)," he added.
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 attitudes toward specific financial products and services. This online survey was conducted by independent research firm Greenwald & Associates. A total of 1,013 investors were surveyed from August 13th to August 26th, 2013. 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 3.14 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 Financial
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife Financial in Canada and Asia, and primarily as John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$567 billion (US$539 billion) as at June 30, 2013. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial 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. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, fixed products, mutual funds, 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.
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