CFA Institute’s annual global market sentiment survey reveals members’ cautious optimism about the future of the financial markets in 2013, tempered by their concern that the underlying problems that contributed to the worldwide economic crisis and the decline in the integrity of the markets have not yet been solved. As experienced participants within the global financial services industry, the opinions expressed in this report are a strong reflection of the views of highly educated, ethical practitioners with unique insights into the opportunities and risks of the financial markets.

When asked whether they believe the global economy will expand, contract, or stay roughly the same over the coming year, 40% of members answered that the economy will expand; 20% believe the global economy will contract. The outlook is still guarded, which is understandable given the ongoing European sovereign debt crisis, an expected slowing of economic growth in China, and the pending fiscal cliff in the United States. But the outlook is clearly more optimistic than last year, when only 34% said the global economy would expand and nearly as many (29%) said the global economy would contract. Members’ outlook on other short-term issues, such as employment opportunities for financial professionals, has also improved slightly over the past year. Further, 50% of those surveyed expect equities to outperform all asset classes, while only about 41% thought that a year ago.

Despite the cautious optimism regarding short-term issues, longer-term issues—the ones that helped bring about the financial crisis whose effects are still being felt—must be addressed for continued positive progress for improvements in economic health and market integrity. In particular, 56% of members identified a continuing lack of ethical culture within financial firms as the major factor contributing to the current lack of trust in the finance industry, and two-thirds said that a culture of ethics and integrity within firms needs to be reestablished. The primary problems are not the physical failures of the market or government actions but the culture of firms within the financial industry.