Investor confidence in the U.S.capital markets declined slightly, but fell even more sharply for marketsoutside the U.S., according to a new survey by the Center for Audit Quality.
Sixty-eight percent of the 1,001 investors polled by theCAQ in its fourth annual "Main Street Investor Survey" indicated theyhave some, quite a bit, or a great deal of confidence in the U.S. capitalmarkets, but that was down from 70 percent when they were polled in 2008. Thewealthiest investors - those with investments of $100,000 or more - have moreconfidence in U.S. capital markets than those whose invested assets are lessthan $100,000 (74 percent vs. 66 percent).
"This is the third year of a depressed economy andthe fact that investors continue to have fundamental confidence in publiclytraded companies and the capital markets is encouraging," said CAQexecutive director Cindy Fornelli in a media briefing Thursday.
Those who expressed some confidence in U.S. capitalmarkets were asked why they felt that way. The top responses given were theeconomic news and data they see (31 percent); trust in the government ingeneral or in President Obama specifically (22 percent); the strength of themarket (15 percent); and perceptions that the recession is over or is windingdown (15 percent).
Those who have little or no confidence in U.S. capitalmarkets were asked why they felt that way. The top two reasons given were toomuch government spending/interference (27 percent) and the economiccrisis/recession in general (23 percent). Some also cited weak governmentoversight of the capital markets and volatility in the U.S. stock market.
However, confidence in capital markets outside the UnitedStates continued a slide that began in 2008. This year's decline was thesteepest to date: Confidence fell 10 percentage points from 2009 to 2010. Ithas fallen 18 percentage points overall since 2007. Currently, less than halfof American investors (47 percent) have confidence in markets outside theUnited States. As in previous years, 15 percent of investors were unable toanswer this question. Similar to the results for the U.S. markets, investorswith investments of $100,000 or more have greater confidence in capital marketsoutside the United States than those with less than $100,000 invested do (53percent vs. 42 percent).
Confidence in audited financial information has remainedsteady. In 2007, 80 percent of investors expressed confidence in auditedfinancial statements. After declining to 70 percent in 2009, confidence inaudited financial information released by publicly traded U.S. companies hasremained unchanged.
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