Despite uncertainty over rising interest rates and concerns about volatility, a new Charles Schwab survey finds that investors see the current environment as a good one for U.S. investment.
According to a survey of more than 1,000 investors at large and 300 active traders, conducted in the first five days following the September Federal Open Market Committee meeting, Schwab found that 58% of investors and 82% of active traders think that now is a good time to invest in the U.S. equities market.
Investors in the general population are a little more bearish and less optimistic than their active-trading counterparts, with 55% calling themselves bearish about the U.S. stock market in the next three to six months and 51% bearish about the fixed income market in the short-term too.
Meanwhile, the survey found greater optimism about the U.S. stock market and investing landscape among the 300 active traders, with 54% bullish about both the U.S. stock market and fixed income market over the next three to six months.
What Your Peers Are Reading
The survey identified general investors’ top investing concerns: 27% cited the overall strength of the U.S. economy, and 19% cited uncertainty due to increased market volatility. According to the survey, 58% of investors call market volatility their “foe.”
“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, in a statement. “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.”
Since the extreme market volatility in late August, 27% of the investors surveyed say they have increased the level of cash in their portfolio, and 35% say they now have a lower tolerance for risk.
There is still a significant percentage of investors staying the course. According to the survey, 57% say they have made no changes to the amount of cash in their portfolio, and 43% say their tolerance for risk has not changed.
“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,” Keough said in a statement.
While the broader population of investors sees market volatility as a cause for some concern, 60% of traders surveyed see volatility as their “friend.”