New Charles Schwab Survey Finds Signs of Optimism Among Active Traders – But Few Feel They’ve Done Enough to Properly Protect Their Portfolios

Tuesday, November 30, 2010 11:06 am PST



Public Company Information:

"It is clear that we have an opportunity to help our clients learn more and take action to help protect their portfolios"

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab today released new data revealing that while active traders are feeling more optimistic about market conditions than they did six months ago, few are confident that their portfolios are properly hedged against risk. The latest Charles Schwab Active Trader Sentiment Survey polled more than 500 individual investors who trade frequently (at least 36 times per year). Key findings include:

  • Thirty-eight percent expressed a bullish outlook for the market in the next six months; up from 28 percent in the last survey published in April. Only 16 percent are bearish compared to 21 percent in April.
  • As bullish sentiment ticks up, traders are putting more money to work. Only 36 percent of traders recently changed their portfolio allocation to include more cash, down from 43 percent in April.
  • Seven out of ten (71 percent) currently consider market volatility a friend, compared to 29 percent who view volatility is a foe.
  • Only 14 percent of those surveyed say they are very confident that their portfolios are properly hedged against risk.

“It is clear that we have an opportunity to help our clients learn more and take action to help protect their portfolios,” said Kelli Keough, vice president of active trading at Charles Schwab. “Experienced traders often seek opportunities in all market environments. One key to successfully weathering the market’s ups and downs is including risk management as a core element of any trading strategy.”

The latest Schwab survey also finds some evidence that active traders are taking small, but important, steps in trading more than just domestic equities. Nearly half (46%) now report they are regularly trading options as a potential method of generating extra income. Ownership of foreign equities is also becoming more common. Fifty-six percent of active traders surveyed say they are exposed to foreign equities, predominantly through Exchange-Traded Funds (ETFs) or American Depository Receipts (ADRs) of non-U.S. based companies.

Traders participating in the Schwab survey also show a clear preference toward technology stocks. Thirty-eight percent say they are now the most bullish on the technology sector, followed distantly by materials (17%), financials (12%), industrials (10%) and consumer discretionary (6%).

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 or call 800-435-9050.

Survey Methodology

Survey data was derived from responses of 524 active traders and investors collected in October 2010. The data was analyzed by Directive Analytics and has a statistical accuracy at the 90 percent and 95 percent confidence levels.

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.

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.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options." Call Schwab at 1-800-435-4000 for a current copy.

Supporting documentation for any claims or statistical information is available upon request.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with more than 300 offices and 7.9 million client brokerage accounts, 1.5 million corporate retirement plan participants, 673,000 banking accounts, and $1.5 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,, 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 its Advisor Services division. 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 and (1110-7296)


Charles Schwab
Alison Wertheim, 415-667-0475
Intermarket Communications
Eric Hazard, 212-754-5610

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