Confidence in U.S. Public Companies at Record Levels; U.S. Exchanges and Capital Markets Show Notable Gains
Washington, DC – Despite turmoil overseas, U.S. investors show strong levels of confidence at home, according to the Center for Audit Quality’s (CAQ) 2014 Main Street Investor Survey. Eighty percent of retail investors exhibited confidence in U.S. public companies, the highest level recorded since the CAQ began surveying on the topic in 2008. Investor confidence in U.S. capital markets has climbed to 73%, up 12 percentage points since 2011.
"These findings should encourage anyone with an interest in the health of our capital markets," said CAQ Executive Director Cindy Fornelli. "They bode well not just for investors, but for the entire U.S. economy, which relies on vibrant financial markets as an engine of capital formation and economic growth."
Strength of U.S. Stock Exchanges, Audit Committees Helps Buoy Investor Confidence
Asked how much confidence they have in a number of different entities when it comes to effectiveness in looking out for investors’ interests, investors express the most confidence in independent auditors (75%), followed closely by audit committees (71%). They also show a robust level of confidence in stock exchanges: 70%, up from 48% in 2011.
Government Regulation, Geopolitical Uncertainty Dominate Investor Views of Risk
The 2014 survey also explored investors’ views on risk and investing. A strong majority of investors see growing geopolitical instability (75%), government regulation (73%), and cyber risks in the capital market system (71%) as the greatest threats to their investment portfolios.
Investors see the energy sector as the safest place to put their money. In the rapidly evolving health care industry, investors perceive both opportunity and peril. They view the health care industry as both a safe and risky investment, with more than one in five investors (22%) considering health care as the riskiest industry, and 24% considering it the safest.
Confidence in Audited Financial Information Continues to Rise
Other notable results from the survey include the following:
- Confidence in audited financial information produced by publicly traded companies rose to 75%, the highest level since 2008.
- Nearly half of investors trust financial planners or advisors the most for investment information and advice (48%).
- Confidence in capital markets outside the U.S. rebounded from a low of 35% in 2012 to 42% in 2013, and has stayed at nearly the same level this year (43%).
A telephone survey of 1,049 investors was conducted August 12-20, 2014 by The Glover Park Group via telephone using a standard random digit dial (RDD) methodology. It has a margin of error of +/-3.0 percent. Investors are defined as those with investments valued at $10,000 or more.
The survey report is available here.
About the CAQ
The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions. Based in Washington, D.C., the CAQ is affiliated with the American Institute of CPAs. For more information, visit www.thecaq.org.