Investors' confidence softened somewhat in the second quarter of 2012, according to the John Hancock Investor Sentiment Index™, released today by John Hancock Financial Services. Investor sentiment declined by just two points to +19 in the second quarter compared with a score of +21 in the first quarter of this year. The shift was attributed to a drop in positive attitudes toward investing in equities. Fewer than half of investors surveyed are bullish on stocks (48 percent compared to 56 percent who were bullish in Q1 2012).

The Index shows that investors overall feel almost the same about investing this year compared to last year. In the second quarter of 2011, the Index score was +18.

Investors' views on most types of investments remain unchanged in the second quarter of 2012 from the year's first quarter. Attitudes toward balanced mutual funds were similar to the prior quarter, with 52 percent now saying that it is a good time to be investing in balanced mutual funds versus 54 percent in the first quarter.  Also unchanged were investors' mixed views on bonds, with 27 percent saying it was a good time to invest in bonds (28 percent in prior quarter) while 25 percent think it is a bad time (26 percent said it was a bad time in the first quarter).

Investing for retirement remains popular. Nearly eight in ten investors feel that now is a good time to be investing in 401(k) plans (78 percent) and three-quarters have similar feelings about IRAs (74 percent).  Investors felt about the same a year ago, with 80 percent saying the second quarter of 2011 was a good time to be investing in 401(k) plans, while 79 percent said it was a good time for IRA investing.

Blue chip stocks will perform the best over the next six months of this year, say nearly twenty percent of investors. Small cap stocks (picked by 16 percent of investors to perform best) were next, followed by emerging market securities (14 percent). Only four percent of investors believe that international equities will perform well, with even fewer optimistic about government bonds (two percent). Investors believe that energy, technology and healthcare companies will provide the best investment opportunities in the next six months. Investors are more inclined than in the previous quarter to cite healthcare as a leading sector (47 percent compared to 42 percent last quarter.

"Having been through considerable volatility in the past few years, investors seem to be saying they aren't terribly fazed by economic trends of the past quarter," said Bill Cheney, John Hancock's Chief Economist. "It looks as though reasonably healthy sentiment is prevailing, with investors focused on meeting their financial goals and investing for retirement. Ninety-three percent of the respondents in our survey describe themselves as long-term investors, and 91 percent say they are savings-oriented."

The John Hancock Investor Sentiment Index™ is a quarterly measure of investors' views on a range of investment choices, life goals, and economic outlook, as well as their confidence in these areas.  The John Hancock Investor Sentiment Index™ is derived from a quarterly poll of approximately 1,000 investors, and reflects the percentage of those who say they believe it is a "good" or "very good" time to invest, minus those who feel the opposite. The second quarter survey was conducted in mid-May of 2012.

Among the findings for Q2 2012:

• Concern about the unrest in the Middle East has decreased significantly from the previous quarter (33 percent versus 40 percent in Q1 2012). However, concern over the Eurozone debt problems has increased significantly (34 percent versus 29 percent last quarter)
• Investors believe they are in a better financial position today compared with two years ago (42 percent). Half (50 percent) believe that, in two years, they again will be in a better financial position. This is a significant decrease from both the previous quarter (57 percent in Q1 2012) and the second quarter of 2011 (58 percent).
• Investors mention the value of their investments decreasing and being able to save enough retirement as their biggest personal financial concerns.
• Investors are highly confident in their ability to attain many lifetime financial goals, with paying off a mortgage (94 percent) and maintaining a financially secure retirement (90 percent) topping the list.