Tuesday, October 6, 2015

Crisis of Confidence

We've talked about how rough the third quarter was for stock market investors. A new survey from John Hancock confirms the notion that individual investors have lost confidence in this market: The Investor Sentiment Index set a record high at the end of the second quarter - but that's all gone now.

For the third quarter, the Investor Sentiment Index fell back to its lowest level since the third quarter of 2014. Confidence in stock investing fell to 51 percent from 60 percent in the second quarter, in balanced mutual funds to 53 percent from 63 percent, and in bonds to 19 percent from 25 percent.

Looking forward, those investors are getting doubtful about blue-chip stocks. Twenty percent of investors said blue chip stocks would be the top-performing asset class over the next six months, down from 29 percent who said this in the fourth quarter of 2014. Sixteen percent of respondents chose small-cap stocks as their other top choice, and 11 percent said emerging markets.

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