New Schwab Survey Finds Pronounced Increase in Bullish Sentiment Among Active Traders

Exchange Traded Funds Also Gaining in Popularity as Traders Seek Ways to Help Better Diversify and Manage Portfolio Risk

Tuesday, December 8, 2009 5:00 am PST

Dateline:

SAN FRANCISCO

Public Company Information:

NASDAQ:
SCHW
"Highest in Investor Satisfaction with Self-Directed Services"

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab today released new data showing that active traders are feeling increasingly more optimistic about the stock market and the U.S. economic recovery. In October 2009, the latest Charles Schwab Active Trader Sentiment survey polled nearly 300 individual investors who trade frequently. Key findings include:

  • Half of respondents (50 percent) report a bullish outlook for the market in the next six months, up from 34 percent in the last survey in July 2009.
  • 35 percent are neutral and only 14 percent are bearish in the new survey compared with 47 percent neutral and 19 percent bearish in July 2009.
  • Nearly two-thirds (63 percent) plan to increase their trading activity in the next six months.
  • 18 percent expect the U.S. economy to show clear signs of recovery in less than six months, up from just 7 percent in the July 2009 survey.
  • In all, 54 percent believe the economy will recover within 12 months.

“While traders are clearly feeling better about the market, we also find they have not forgotten some of the lessons learned from the recent downturn,” said Kelli Keough, vice president, Schwab Investor Services. “Traders are taking a much more active role today than ever before when it comes to diversifying their portfolios and managing them against continued volatility and unnecessary risk.”

ETFs Gaining in Popularity

The latest Schwab survey finds clear evidence that active traders are seeking more diversification. For example, more than half (55 percent) of respondents now say they are using exchange traded funds (ETFs), up from 43 percent in July 2009. Among those that are trading ETFs, 17 percent say ETFs are their preferred investment vehicle.

“There’s probably a place for ETFs in most active trading portfolios,” noted Keough. “We see many traders using them as a relatively easy, cost-effective way to gain exposure to sector or industry trends and to access international markets for diversification.”

Other key survey findings include:

  • Most traders are putting their money to work. A majority of those surveyed (55 percent) are holding 30 percent or less of their long-term portfolio in cash or cash investments.
  • Traders are biased toward the U.S. market. Half (50 percent) of respondents say the U.S. market is most attractive right now, followed by Asia (24 percent), Emerging Markets (23 percent) and Europe (3 percent).
  • 40 percent of traders surveyed believe technology stocks will lead the market recovery, followed by financials (29 percent). This compares with financials (40 percent) and technology (32 percent) in the July 2009 survey.

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

Survey data was derived from responses of 292 active traders and investors collected in October 2009. The data was analyzed by Directive Analytics and has a statistical accuracy at 95 percent confidence level.

Some specialized exchange-traded funds can be subject to additional market risks. Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost.

Investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

Since a sector fund is typically not diversified and focuses its investments on companies involved in a specific sector, the fund may involve a greater degree of risk than an investment in other mutual funds with greater diversification.

Investments in foreign assets may incur greater risks than domestic investments. Investing in emerging markets may accentuate these risks.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 687,000 banking accounts, and $1.3 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. Named "Highest in Investor Satisfaction with Self-Directed Services" by J.D. Power and Associates in 2009, 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. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com. (1209-12005)

Contact:

Charles Schwab
Lara Edge, 415-667-0588
Lara.Edge@schwab.com
or
Intermarket Communications
Stephanie Lowenthal, 212-774-5415
slowenthal@intermarket.com

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