Wednesday, January 6, 2016

Weakening Investor Sentiment

Given the way the stock market tumbled to a close at the end of the year, it should be no surprise that John Hancock’s investor sentiment index fell to plus-22 in the fourth quarter, matching a low last reached in the third quarter of 2013. The quarterly poll measures 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.

Confidence in investing in stocks was 60 percent the year before, in the fourth quarter of 2014, but fell to 49 percent at the end of last year. It wasn't just stocks: Even optimism toward investing in balanced mutual funds, which incorporate both stocks and bonds, fell to 52 percent from 58 percent a year ago.

What do people still feel good about? Two thirds of investors were still positive about investing in their own homes, and 56 percent were positive about real estate investments in general. And investors continue to stay the course with retirement savings, with nearly eight in ten of them saying now is a good time to contribute to 401(k) plans and IRAs.

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