Investor confidence in the U.S. economy is at its highest point since 2009, but Americans are still less willing to take investment risks than they were seven years ago. A survey released Thursday by the Center for Audit Quality, a Washington, D.C.-based group that tracks the veracity of public-company auditing, found that 73 percent of investors say they are confident in U.S. capital markets, up from 61 percent in 2011.
The survey also suggests that investors consider energy, health care and technology to be the safest bets over the next year. The riskiest sectors, they said, are transportation, banking, industrials and media.
“The results show that about a third of investors are willing to take risk after doing their homework,” Cynthia Fornelli, executive director for the CAQ, wrote in the report. “When it comes to investment risks, they are most concerned about geopolitical instability, government regulation, and cyber and online security.”
The telephone poll of 1,049 investors in August found that although some three-quarters of respondents have “some,” “quite a bit” or “a great deal” of confidence in the U.S. stock markets, investors are still about 15 percent less optimistic than they were in 2007 prior to the Great Recession. At the time, 84 percent of respondents were bullish on U.S. markets.
When asked specifically about their faith in publicly traded companies, four out of five investors said they were bullish, the highest level since the survey began asking the question in 2008.
Out of the confident investors, 45 percent believe U.S. capital markets are in good shape, have confidence in the U.S. handling of the markets, or have had positive recent experience in their personal investments.
Roughly one in four investors said they lacked confidence, citing their impression that the economy isn’t doing well, U.S. political gridlock that adversely affects stock markets and government interference.
The report suggests the U.S. is still considered a safe haven for investment compared to markets outside the country. About 43 percent of those surveyed are confident in putting their money in stock investments abroad, up from 35 percent in 2012 but lower than 65 percent in 2007. Investors cited U.S. problems affecting markets abroad and instability abroad as the most common reasons to shy away from investment in foreign markets.
When it comes to risk-taking, about half of the investors said they are “pretty cautious” while about one in four said they’re willing to take investment risks if they conduct “adequate” research beforehand. Read the full report here.