The Majority of Investors Say Now is a Good Time to Invest Despite Uncertainty Over the Fed and Concerns About Volatility

Schwab survey reveals active traders as even more bullish;
See opportunity in volatility and rising rates

Thursday, October 8, 2015 5:30 am PDT



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"It’s important for investors to keep their emotions in check through short term market events and stay focused on their plan and goals"

SAN FRANCISCO--(BUSINESS WIRE)--Investors see the current environment as a good time to invest despite concerns about the strength of the U.S. stock market says a new survey of more than 1,000 investors-at-large and 300 active traders conducted by Charles Schwab in the first five days following the September Fed meeting. Fifty-eight percent of investors and 82 percent of active traders surveyed say now is a good time to invest in the U.S. equities market.

That said, investors in the general population appear to be bracing for continued choppiness in the short term with 55 percent calling themselves bearish about the U.S. stock market in the next three to six months, and 51 percent bearish about the fixed income market during the same time period.

Longer term, however, 43 percent believe the current bull market will last another six to 12 months and nearly a quarter thinks positive market conditions will continue for another one to two years.

Investors list their top concerns about investing in the U.S. stock market as the overall strength of the U.S. economy (27 percent) and uncertainty due to increased market volatility (19 percent). Fifty-eight percent of investors call market volatility their “foe” while 42 percent see it as their “friend.”

Since the extreme market volatility in late August, 27 percent of investors say they have increased the level of cash in their portfolio, and 35 percent say they now have a lower tolerance for risk. But a significant percentage of investors surveyed are staying the course: 57 percent say they have made no changes to the amount of cash in their portfolio and 43 percent say their tolerance for risk has not changed.

“It’s important for investors to keep their emotions in check through short term market events and stay focused on their plan and goals,” said Kelli Keough, Senior Vice President of Trading Services at Charles Schwab. “People who are engaged and informed about their investment strategy and have a plan in place are typically more likely to ride out volatility like we’ve seen since August.”

“Periods of market volatility do give investors the chance to revisit their emotional and financial tolerance for risk, and a significant move up or down in the market can be an opportunity to think about portfolio rebalancing - two important things for investors to consider relative to their broader plan and goals,” noted Keough.

Investor Uncertainty over the Fed and Interest Rates

Investors are divided over the impact rising rates might have on the U.S. stock market. Forty-four percent think the prospect of a Fed rate increase poses a threat to the current bull market, while 23 percent do not believe an increase poses a threat, and one-third say they aren’t sure how rising rates could influence the stock market.

When asked about how rising rates will impact their own financial well-being, investors are also divided. Thirty-eight percent think it will have a negative impact, 35 percent believe it will have a positive impact, and 27 percent say it won’t make any difference.

There is more consensus, however, about the path the Fed will take once it begins raising rates. Nearly three-quarters of investors (74 percent) believe the Fed will increase rates slowly over time, while 26 percent think rates will go up quickly.

Majority of Active Traders are Bullish, Prepared to Take Advantage of a Bumpy Ride

Schwab found greater optimism about the U.S. stock market and investing landscape in the companion survey of 300 active traders. Fifty-four percent are bullish about the U.S. stock market over the next three to six months, and the same percentage is bullish about the fixed income market over the same time period.

While the broader population of investors sees market volatility as a cause for some concern, 60 percent of traders surveyed see volatility as their “friend.” Since volatility spiked in August, 55 percent of traders say they have increased their cash allocations, possibly suggesting that they are looking to take advantage of buying opportunities amidst the market’s ups and downs. In fact, 42 percent of traders say they plan to trade more between now and the end of the year compared to their level of trading during the first three quarters of 2015 – nearly double the number who expect to trade less (22 percent).

”While some traders are approaching recent market uncertainty with caution and a quarter have concerns over the strength of the U.S. economy, the majority believe opportunities can be found in market swings and have an optimistic outlook in the near-term,” added Keough.

Fifty-eight percent of active traders think the Fed moving to raise interest rates poses a threat to the U.S. bull market, compared to 28 percent who say it does not. However they are more positive than general investors about how an increase in rates will impact their financial well-being – nearly half (49 percent) believe rising rates will have a positive impact in this regard. Active traders also foresee the Fed taking a slow and steady approach – 63 percent say the Fed will raise rates slowly once the process begins.

About the Survey

The online survey was conducted by Koski Research on September 17-21, 2015 among a general population of 1,081 retail investors with investable assets of $50,000 or more and 300 active traders defined as investors who trade 24 or more times per year. The margin of error for the investor survey sample is 3.0 percent. The margin of error for the active trader survey sample is 5.7 percent.

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. More information is available at Follow us on Twitter, Facebook, YouTube and LinkedIn.


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,, 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. Koski Research is not affiliated with the Charles Schwab Corporation or its affiliates. More information is available at and

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