Investor confidence takes a hit in Q3

Here’s a shock: international business and political events shook the confidence of Canadian investors in the third quarter. That’s the finding of the latest Manulife Financial Investor Sentiment Index survey.

The debate over raising the American debt ceiling was cited by 34% of survey respondents as a cause for concern, while 24% cited the uncertainty around Greece’s debt problems.

The tsunami that smashed into Japan in March was still weighing on the confidence of 25% of respondents.

Political instability in the Middle East and North Africa was cited by 19%.

Surely the news that Osama bin Laden had been killed by a team of U.S. Navy Seals boosted investor spirits; not according to the survey. Nor was the resumption of oil drilling in the Gulf of Mexico seen as a positive.

The results of the federal election in May, continued to have an impact on investment decisions in the third quarter: 17% said it boosted their confidence, while 16% said it had a negative impact.

Overall, the Manulife Financial Investor Sentiment Index dropped eight points from the second quarter of 2011 to a total of +21, one point ahead of where it began the year.

As is often the case when uncertainty rises, Canadians expressed optimism toward their homes as investments. But confidence in virtually every other asset class declined—cash was the exception, with no change in confidence.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.