Investors Less Confident in U.S Capital Markets than During Crisis
Investors confidence in the U.S. capital markets is less than what is was during the financial crisis, according to a survey released by the Center for Audit Quality.
The center's fourth annual "Main Street Investors Survey" finding only 68% of the survey's respondents had quite a bit, or a great deal of confidence in the U.S. capital markets. Its the lowest reading since the center began conducting the survey, down from 73% in last year and 70% in 2008. Wealthier individuals, or those with investments of more than $100,000, had greater confidence in the capital markets at 74%.
"I was a little surprised they (the numbers) remained so solid," said the center's Executive Director Cindy Fornelli.
Fornelli said given its the third year of a difficult economy, the fact confidence remained fairly steady suggests investors fundamentally have confidence in U.S. publicly traded companies and capital markets.
Of those saying they had confidence in the U.S markets, 33% cited economic news, 22% said the government and 15% cited strength in the market as the primary reasons for their confidence.
Topping the reasons given by those who had little or no confidence in the markets, 27% said too much government spending and interference, with 23% citing the economic crisis and recession.
Still the majority investors, 75% say they have confidence in investing in U.S. companies, unchanged from last year, with 70% of them saying they had confidence in corporate America's audited financial statements.
But fewer respondents say they have confidence in the government preventing a future financial crisis with only 45% saying the government could do this, despite this year's passage of the Dodd-Frank bill.
The biggest shift in confidence focused on overseas markets. While confidence in the U.S. markets was relatively stable, there was a 10% slide in investors confidence in capital markets outside of the U.S, with only 47% expressing confidence in these markets.
The survey was conducted to In conjuction with the Glover Park Group during the week of July 14-22. The center, an independent organization devoted to enhancing public trust in the global capital markets, polls 1,001 people via telephone who have more than $10,000 dollars in investments and who claim to be the households primary decision maker when it somes to finances. The survey has a margin of error of plus or minus 3%.