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SAN FRANCISCO--(BUSINESS WIRE)--According to data captured in Charles Schwab’s most recent Trading Services Sentiment Survey, only 10 percent of traders say they have a bearish outlook for the next three to six months – the lowest level seen since the survey’s inception in February 2008, and a notable drop from September 2013 when 15 percent of traders surveyed had a negative short-term outlook.
While the vast majority of traders (90 percent) have a bullish or neutral near-term market outlook, only 23 percent of traders surveyed say they have changed their portfolio allocation to include less cash in the past three months – while one in three indicate they have increased their cash allocation. And, just 10 percent of respondents report being very confident that their portfolios are properly hedged against risk.
“While general outlook is more positive than we’ve seen in the past, we haven’t seen bullish sentiment translate into changes in trading behavior yet,” said Kelli Keough, Senior Vice President of Trading Services at Charles Schwab. “The survey results reflect what we’re hearing from our Trading Services clients – some say they feel the markets are overvalued, so they’re sitting on cash awaiting a pullback.”
Two in five traders (37 percent) indicate they are most bullish on the technology sector heading into 2014 while nearly 20 percent express the most confidence in the healthcare sector. Conversely, nearly a quarter of those surveyed (24 percent) say they are most bearish on utilities. The following is a breakout of the top three sectors on which traders indicate they are most bullish and bearish:
|Most Bullish||Percentage||Most Bearish||Percentage|
New Year’s Trading Resolutions
When asked about their commitment to a trading plan over the last year, more than half of traders surveyed (63 percent) report sticking closely to their plan or deviating slightly from time to time, while just five percent report feeling overwhelmed and deviating from their trading plan. Three in ten respondents (32 percent) report that they did not develop a trading plan at all and instead reacted to market conditions to make trading decisions.
“Developing a trading plan, and sticking to it, can help traders lower their anxiety and keep their trading on track in the New Year and beyond,” said Randy Frederick, Managing Director of Active Trading and Derivatives, Schwab Center for Financial Research. “Diversification and a proper asset allocation plan, setting realistic profit goals and determining proper loss thresholds are all critical factors for traders looking to devise an individual plan, and keeping things simple is often the most effective course of action.”
Looking ahead to 2014, 46 percent of traders indicate they intend to devote more time to trading education as part of their New Year’s trading resolutions, while 43 percent intend to identify new trading opportunities. Additionally, about one quarter (28 percent) of participants said they plan to develop and follow a trading plan.
“The focus on building knowledge in the New Year is particularly noteworthy as it is a trend that we are already seeing from our clients with record attendance levels at our live and virtual education events around the country,” added Keough. “Traders remain focused on the importance of assessing what’s worked and what hasn’t. They are taking advantage of the education that is available, and consulting the experts if a course correction is necessary – all hallmarks of an informed and sophisticated trader.”
Data from the Charles Schwab Trading Services Sentiment Survey were derived from 781 responses of participants in Charles Schwab’s Trader Education event that took place on December 3, 2013. More than 550 traders attended the event in person and more than 1,400 people participated in the live online component of the event.
Schwab provides traders with superior trading platforms, free seminars and workshops, online education resources and 24-hour access to experienced trading specialists, with no minimum trade requirements. For more information, please visit www.schwab.com/trader or call 888-245-6864.
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About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) 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; compliance and trade monitoring solutions; 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 lending services and products. More information is available at www.schwab.com and www.aboutschwab.com.
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