April 2, 2013
/PRNewswire/ -- Investor sentiment reached its highest level of the past three years during the first quarter of 2013, according to the
Investor Sentiment Index®. The Index score shot up six points to +24 in 2013's first quarter from +18 in the final quarter of 2012, largely due to investors' significantly more positive attitudes toward investing in stocks, balanced mutual funds and their own homes. The previous high score was +22, measured in Q1 of 2011. The Index, which debuted in the first quarter of 2011, posted its lowest-ever score in the third quarter of 2011.
Compared with the last three months of 2012, a significantly larger share of investors think that now is a good time to invest in stocks (58 percent vs. 48 percent in Q4 2012). The number of investors who believe now is a good time to invest in balanced mutual funds also increased significantly to 57 percent, compared with 50 percent in Q4 2012. Real estate, including one's own home, also registered positively, with the share citing one's own home as a good investment at 65 percent and real estate at 64 percent, compared with 59 percent for both at the end of 2012. A large segment of investors appear committed to funneling cash to investments, with 64 percent saying it is a bad time to hold on to cash.
"We are seeing a remarkable shift in sentiment on the part of investors," said
, John Hancock's Chief Economist. "They are showing much more optimism about their financial positions overall. More than 70 percent say that 2013 will be a positive year for the average U.S. investor (72 percent), and two-thirds (68 percent) are optimistic that two years from now, the U.S. economy will be stronger. Just about half (48 percent) say their financial position is better now than it was in 2011, which is up significantly from the last two quarters (42 percent in Q4 2012 and 39 percent in Q3 2012). And a nearly identical share believes they will be in a better financial position two years from now (49 percent)."
Investors also say that now is a good time to invest in 401(k) plans (82 percent compared with 73 percent who thought it was a good time in Q4 of 2012), and they are also favorably inclined toward IRAs, with 79 percent saying it is a good time to put money in those plans compared with 72 percent who thought so in Q4 of last year.