Do You Trust Corporate America?

Hardly at all these days, say our readers. And that feeling extends to the ability of Congress and agencies to fix what's wrong

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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
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?

Option Total %  
Yes 396 77.5 %
No 115 22.5 %
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