September 29, 2016

Press Conference Call: 2016 Main Street Investor Survey

Press Conference Call: 2016 Main Street Investor Survey
Cindy Fornelli, Executive Director, Center for Audit Quality
Thursday, September 29, 2016

[INTRODUCTION BY CONFERENCE CALL OPERATOR]

[CINDY OPENING STATEMENT, AS PREPARED FOR DELIVERY]

Good morning, and thank you for joining today’s call.

Today, the Center for Audit Quality is pleased to release the 10th Annual Main Street Investor Survey, which asks retail, or "mom-and-pop," investors about their confidence in capital markets, public companies, audited financial statements, and entities charged with serving investors. This year’s survey also explores investors’ views on risks to the economy and events that could impact future investment decisions.

With 10 years of data, the Main Street Investor Survey provides a sweeping view of the strength and resilience of U.S. investors and the robust confidence they place in our capital markets system. The 2016 survey paints a strong picture of that confidence.

Let’s dive into the numbers.

A robust 79 percent of Main Street investors are confident in U.S. capital markets.

Eighty-one percent have confidence investing in U.S. publicly-traded companies – that's an all-time high for the survey.

Digging a little deeper, we found that men and women have slightly different levels of confidence. While 85 percent of men are confident investing in U.S. public companies, only 76 percent of women are confident.

Age also appears to play a role in investor confidence, with millennials reporting the highest confidence of any generation in each category. For example, while 89 percent of millennials are confident in U.S. markets, only 77 percent of baby boomers are confident.

Confidence in capital markets outside of the U.S. rebounded slightly from 2015, with 42 percent of investors expressing confidence in global markets compared.  

Again, there was a difference between men and women, with 47 percent of men saying they are confident in capital markets outside the U.S. versus 38 percent of women.

We also found some generational differences. One of the more interesting was that Millennials said they are 70 percent confident in markets outside the U.S., compared to 36 percent of baby boomers.

Confidence in audited financial information also remains high at 75 percent, nearing the highest level of confidence recorded, which was 80 percent in 2007.

Investors are also very confident in many of the entities that have a role in investor protection.

  • Once again, independent auditors top this list of entities, with a confidence level of 81 percent, an all-time high.
  • Seventy-seven percent of investors expressed confidence in independent audit committees.
  • Stock exchanges, financial analysts, and credit rating agencies also show relatively high levels of confidence.

We at the CAQ are encouraged to observe strong levels of confidence in the role public company auditors play.

The audit profession is committed to continuous improvement, always looking for new and better ways to serve investors and build trust in our capital markets.

For the 10th annual survey, we included a couple of questions to gauge Main Street investor views on risks to the economy and what events could impact their investing behavior.

Not surprisingly, investors are keeping a close eye on the presidential race and the upcoming election. In fact, a majority – 57 percent - said the next president will impact their investment decisions “a lot.”

[Breaking it down by political party, 61 percent of Republicans said the next president will impact their investment decisions “a lot,” compared to 55 percent of Independents and 53 percent of Democrats.]

Finally, we asked investors about the greatest risks to the U.S. economy.

The top responses were (1) the growing national debt, and (2) global political unrest. Tied for third place were…

  • a possible terrorist attack on the U.S., and
  • cybersecurity threats to their personal financial information or the capital markets.

Those are the topline results, but the full survey has a wealth of additional data. We’ll be more than happy to provide you with the full report including demographic breakdowns and additional historical data from the survey. Surveys from past years are also available on our website at www.thecaq.org.

The Main Street Investor Survey exemplifies the CAQ’s commitment to enhancing understanding of and confidence in capital markets. We’re very pleased to now have a decade’s worth of data, and believe it will be valuable to those in the private sector, policymakers, and the broader public.

Thank you again for joining our call. And with that, I’ll be happy to take any questions you have.

QUESTIONS?