Investor Confidence Dropped In August - Survey

Ilya Timofeyev Reporter in London 3 September 2010

Investor Confidence Dropped In August - Survey

Worldwide, investor confidence fell 4.4 points from July’s revised reading of 92.1, according to the State Street Investor Confidence Index for August.

In North America investor confidence dropped  to 95.3 from July’s reading of 101, with confidence also falling among European investors to 98.7 from the previous month's reading of 99.9. Asia followed suit with confidence ticking down  from 103.8 to 102.2.

The index measures investor confidence on a quantitative basis by analysing the actual buying and selling patterns of institutional investors; the greater the percentage allocation to equities, the higher the risk appetite or confidence, with 100 being neutral. 

“This month, the Global Investor Confidence Index gave back the modest gains recorded last month, providing evidence that institutional investors remain non-committal in the face of a weaker macro-economic backdrop,” said Ken Froot, professor at Harvard University and a co-developer of the index.

“August marks the fifth consecutive month that the index has remained below the neutral level of 100. Despite the relative strength of corporate balance sheets, question marks remain over the slow pace of economic recovery and the relative efficacy of policy measures to spur that recovery.”


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