The Center for Audit Quality released some fresh data yesterday on investor confidence in the U.S. markets. The findings, from a survey overseen by my firm, are interesting for a couple of reasons.
First, and perhaps not all that surprising, is that if the GOP succeeds in taking the country to the edge of default, investor confidence will nosedive. What is surprising is that the survey suggests confidence would plummet far below the low point it hit during the financial crisis. The decline in investor confidence following the near-collapse of the financial markets in 2008 would pale in comparison to the hit that confidence will take if the United States defaults on its financial obligations.
Second, the survey results show that confidence is holding steady at the moment, meaning that, for the all brinkmanship, Congress still has time to work this out and save us from the worst of the impact.
Lastly, and totally unrelated to the spectacle in D.C., is that the survey uncovered what I believe is an emerging trend: “main street” investors consider more non-financial factors than financial factors when making investment decisions about public companies, including whether a company has strong corporate governance in place and if it is acting in a socially responsible manner. This finding has real implications for companies, how they act and what they communicate to investors. It implies that investors are demanding more from companies than simply meeting quarterly performance numbers. This should embolden those who believe in a more socially responsible and sustainable version of capitalism.