When it comes to finding someone who'll give them an accurate portrayal of how companies are performing financially, investors have little confidence in corporate leaders or auditors. And they don't believe Washington can do much to improve the situation.
However, that doesn't seem to dissuade them much from continuing to invest in stocks.
Those are some of the conclusions from our June 13 Reader Survey. Of the more than 500 readers who participated, nearly 78% said they invest in stocks or stock mutual funds outside of a 401(k) plan. Some 17% said that over the next six months they'll probably invest more, while 15% said they'll invest less, and 36% said they'll stand pat.
Sounds pretty benign, until you hear what the respondents think of everyone they're affected by when they invest.
NO HELP EXPECTED.
For instance, some 92% have "only some" or "hardly any" confidence that the market treats individual investors fairly. Some 93% have "only some" or "hardly any" confidence in those who run big companies. About 95% feel the same way about big auditing companies, such as Arthur Andersen.
Some 82% are either "not too confident" or "not at all confident" that corporations accurately report how much money they make.
And few of the repondents really believe that anyone can or will do much about all this. For instance, 94% have "only some" or "hardly any" confidence that Congress can write effective rules governing corporate financial practices. Some 93% have the same view of the chances that federal regulatory agencies can do the job. And 60% strongly disagree that corporations can successfully reform themselves.
Here are the full results of this survey, which, while sobering, isn't scientific, since anyone who wished to could participate:
Over the next six months, what will you probably do about your investments in stocks or stock mutual funds?
|Invest a lot more||16||3.16 %|
|Invest somewhat more||84||16.57 %|
|Reduce your investments somewhat||75||14.79 %|
|Reduce your investments a lot||97||19.13 %|
|Keep your existing investments||180||35.5 %|
|Not sure||55||10.85 %|
How much confidence do you have that the stock market treats individual investors fairly?
|A great deal||30||5.89 %|
|Only some||157||30.84 %|
|Hardly any||311||61.1 %|
|Not sure||11||2.16 %|
How much confidence do you have in those running big businesses?
|A great deal||28||5.50 %|
|Only some||171||33.6 %|
|Hardly any||302||59.33 %|
|Not sure||8||1.57 %|
How much confidence do you have in those running big auditing companies such as Arthur Andersen?
|A great deal||16||3.15 %|
|Only some||152||29.92 %|
|Hardly any||331||65.16 %|
|Not sure||9||1.77 %|
How much confidence do you have in the ability of Congress to write effective rules governing corporate financial practices?
|A great deal||17||3.33 %|
|Only some||145||28.43 %|
|Hardly any||336||65.88 %|
|Not sure||12||2.35 %|
How much confidence do you have in the ability of federal agencies to regulate corporate financial practices?
|A great deal||26||5.13 %|
|Only some||216||42.6 %|
|Hardly any||256||50.49 %|
|Not sure||9||1.78 %|
How confident are you that corporations accurately report how much money they make?
|Very confident||9||1.77 %|
|Somewhat confident||83||16.34 %|
|Not too confident||234||46.06 %|
|Not at all confident||182||35.83 %|
Do you agree or disagree that corporations can reform themselves without new laws and regulations?
|Strongly agree||27||5.30 %|
|Only somewhat agree||101||19.84 %|
|Only somewhat disagree||76||14.93 %|
|Strongly disagree||305||59.92 %|
Do you currently invest in stocks or stock mutual funds outside an employer-sponsored 401(k) plan?