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Investor sentiment jumps in 2014's final quarter

Staff writer |
Investor sentiment took a jump upward in the fourth quarter of 2014 after remaining level for the previous year, according to the John Hancock Investor Sentiment Index, a quarterly measure of investors' views on a range of investment choices, life goals, and economic outlook.

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Investors' positive feelings about stocks helped drive the Index score to +26, matching its previous record high in the second quarter of 2013.

The John Hancock Investor Sentiment Index® reflects the percentage of investors who say they believe it is a "good" or "very good" time to invest, minus those who feel the opposite. The fourth quarter survey was conducted in mid- to late November of 2014.

Six in ten investors said they are confident about investing in stocks, while a similar share expressed optimism about investing in balanced mutual funds. Nearly 30 percent believe that blue chip stocks will be the market's top performers over the next six months, a jump in expectation from Q3 of 2014 when 22 percent thought this would be the case.

Among sectors, technology, healthcare and energy companies offer the best investment opportunities in the next six months, investors say.

Saving for retirement remains a key priority. Eight in ten said that now is a good time to put money away in 401(k) plans or IRAs. About two in five are positive toward investing in Target Risk Funds and Target Date Funds. Half of investors have positive views of contributing to 529 college Savings plans.

A quarter of investors cite their savings and investment portfolios as the main reason they believe their financial situation will be better in the future. Eighteen percent chalked their optimism up to having paid down debt. Of the eight percent of investors who predict their financial situation will be worse in two years, one-third cite government and politics as the main reason.

The future is not without worry, however, investors say. The cost of healthcare is of major concern to 54 percent of investors surveyed. Four in ten are very concerned about unrest in the Middle East, a share that has increased significantly from last year (from 29 percent in Q4 2013).

Worry over the prices of oil and gasoline prices took a big drop, with only one in six expressing great concern, compared with 26 percent in Q3 of 2014 and 33 percent in Q2 of 2014.

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