Investor Relations

Retail Investors Highly Confident in U.S. Capital Markets

More investors say they trust auditors, financial analysts, and rating agencies, according to a new survey.
Sean AlloccaSeptember 29, 2016
Retail Investors Highly Confident in U.S. Capital Markets

Despite a turbulent upcoming presidential election, American retail investors have overwhelming confidence in U.S. capital markets, publicly traded companies, and the firms that audit publicly traded companies, according to a new survey from the Center for Audit Quality.

The 10th annual “Main Street Investor Survey: A Decade of Investor Confidence” found that 81% of 1,004 retail investors responding are confident investing in U.S. publicly traded companies and 75% are confident in the audited financial information released by companies.

The percentage of retail investors confident in the U.S. capital markets and publicly traded U.S. companies is the highest the survey has measured since before the financial crisis.

Citing positive returns and encouraging statements about companies, investors also say they have a healthy trust in financial analysts (76%), credit rating agencies (76%), and financial advisors (75%). Only 34%, in contrast, have the same faith in Congress.

“Spanning periods of both relative prosperity and extreme market turmoil, the survey has queried thousands of individuals, producing a myriad of data points and insights over the past decade,” said CAQ executive director Cynthia Fornelli. “Yet stepping back from the details, a bigger picture becomes very clear: the strength and resilience of U.S. investors and the robust confidence they place in our capital markets system.”

Investors feel the ballooning national debt is the most pressing risk to the national economy over the next four years at 29%. Global political unrest (19%), terrorist attacks on the United States (17%), and cyber-attacks (17%) are also causes for concern.

Perhaps not surprisingly, November’s election will significantly impact more than half of the respondents’ investment plans in the next year, according to the survey.

Capital markets outside the United States fare much poorer. Only 44% of retail investors express confidence in foreign markets, with 14% citing a “gut feeling” of distrust. Other investors blame a lack of stability (13%) and bad economic climates (12%).

The CAQ is an autonomous public policy organization that commissions the “Main Street Investor Survey” annually. The survey polls primary decision makers with investments of at least $10,000.