Active Traders Say They Still Expect Year-End Stock Market Gains, According to Schwab Survey

Respondents give government poor grades on investing policies

Monday, October 31, 2011 7:00 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Despite disappointment in the government and its pursuit of investing policies, active traders still believe there are opportunities in the market"

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab today released new data showing that most active traders surveyed are still somewhat optimistic that the stock market will recoup recent losses before the end of the year. However, a majority of those surveyed believe the U.S. government is not doing enough to encourage investing.

The latest Charles Schwab Active Trader Sentiment Survey polled nearly 475 individual investors who trade frequently (at least 36 times per year) and asked them to grade elected government officials on their pursuit of policies that encourage investing. Very few respondents gave them high rankings:

  • Only 13 percent of respondents gave the government a grade of “A” or “B”
  • More than half (53 percent) gave the government a grade of “C” or “D”
  • One-third (33 percent) gave the government a grade of “F”

Despite political skepticism, most respondents believe the stock market could rally before the end of the year. Seventy-two percent of traders predict the S&P 500 will finish 2011 either flat or with an overall gain. However, only 25 percent of traders describe themselves as having a bullish outlook, compared to 47 percent who said the same thing in May of this year.

Other key findings of the survey include:

  • Traders are most bullish on the technology sector (42 percent), distantly followed by materials (17 percent) and consumer discretionary (11 percent).
  • Only 10 percent say they are very confident their portfolio is properly hedged against risk.
  • Nearly half (46 percent) own foreign stocks but 64 percent believe the U.S. is the most appealing market in the current environment, followed by China (13 percent), Brazil (11 percent) and India (5 percent).

“Despite disappointment in the government and its pursuit of investing policies, active traders still believe there are opportunities in the market,” said Kelli Keough, vice president of active trading at Charles Schwab.

Keough noted that the latest results of the Schwab Survey of Investor Confidence, a separate survey which examines the views of more than 1,000 Schwab retail investors each quarter, echoes these same sentiments. In that poll, 43 percent of active traders included in the sample say it’s a good time to invest in equities and 46 percent say they have a high level of confidence in their ability to make investment decisions.

“Active traders remain highly engaged, and whether the investing waters are calm or rough, our goal is to empower our clients to make the best trading decisions possible. We continue to enhance the tools and resources we offer clients to help them navigate the market,” added Keough.

For More Information

Charles Schwab provides active traders with several trading platforms, free seminars and workshops, online education resources and 24-hour access to experienced trading specialists. For more information, please visit www.schwab.com/AT or call 800-435-9050.

Survey Methodology

Data from the Charles Schwab Active Trader Sentiment Survey were derived from responses of 473 active traders collected in early October 2011 and analyzed by Directive Analytics. Data on total (N=473) have a margin of error of +/- 4.5% at the 95% confidence interval.

Online interviews with 1,033 Schwab Investor Services clients were conducted on September 8-23 by global market research firm Synovate for the Schwab Survey of Investor Confidence.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations and the potential for illiquid markets.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 8.5 million active brokerage accounts, 1.46 million corporate retirement plan participants, 769,000 banking accounts, and $1.58 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at www.schwab.com and www.aboutschwab.com. (1011-7033)

Contact:

Charles Schwab
Alison Wertheim, 415-667-0475
Alison.Wertheim@schwab.com
or
Intermarket Communications
Neil Shapiro, 212-754-5423
nshapiro@intermarket.com

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