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Financial planning

 

December 2012

U.S. investors’ confidence in domestic capital markets has rebounded, but their faith in markets outside the United States has continued to decline, according to new research by the Center for Audit Quality (CAQ).

Sixty-five percent of investors reported that they have some, quite a bit, or a great deal of confidence in U.S. capital markets in the sixth annual Main Street Investor Survey released by the CAQ, which is affiliated with the AICPA. That is an increase of four percentage points over the previous year.

That percentage had decreased in the 2010 and 2011 surveys; it still significantly trails the 84% who reported confidence in U.S. markets in 2007—before the financial crisis.

“This year’s results suggest that confidence about domestic markets may have stabilized and perhaps even begun to rebound,” CAQ Executive Director Cindy Fornelli wrote in the introduction to the survey report.

In contrast, confidence in capital markets outside the United States fell eight percentage points to 35%. The percentage has dropped each year since 2007, when 65% of investors reported confidence in capital markets abroad.

The survey, available at tinyurl.com/963u5oo, drew responses from 1,003 U.S. adults who live in households with $10,000 or more in investments, including stocks, bonds, mutual funds, IRAs, and 401(k)s.

Investors who indicated little or no confidence in U.S. capital markets most frequently blamed the state of the economy (37%), followed by too much government regulation (25%) and weak government oversight of capital markets (22%).

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