2 in 3 Investors Say Stocks, Bonds and Mutual Funds Aren't Enough: Schwab

Nine in 10 investors reported that they make trades at least annually, and nearly half trade monthly or quarterly. Only 30% said they trade less often than when they began.

At the same time, 63% of respondents said that today’s market environment demands greater long-term discipline, and 68% said they have more patience to let their investments grow than they did when they first started.

Younger generations, who are often thought to favor quick wins, are also showing this discipline, Schwab found. Seventy-two percent of millennial investors said they are more patient now, as did 62% of Generation Z investors.

“Even in a world that can feel driven by instant gratification, it’s encouraging to see so many investors recognize the importance of taking a long-term perspective and steadily building wealth,” Jonathan Craig, head of retail investing at Charles Schwab, said in a statement.

Craig noted that having a long-term perspective does not necessarily mean just buying and holding investments. Investors are more engaged than ever before, actively trading and exploring new strategies.

“New asset types are adding to this momentum by drawing a new generation of investors and creating more ways to diversify, a principle that has always been central to long-term investing success,” he said.

Logica Research conducted the online survey from April 24 to May 23 among 2,400 Americans 21 to 75. An additional 200 Gen Z and 200 current crypto investors completed the study.

Alts Spark Interest

The survey found that investors’ interest in cryptocurrency is growing. Forty-one percent of respondents now consider it a good investment, with 23% having always believed in its potential and another 18% having recently come around to believing this.

Even as more Americans embrace cryptocurrency, both current investors and those still on the sidelines also acknowledge its risks. Still, two-thirds of current cryptocurrency investors plan to increase their allocations over the next 20 years.

On average, stocks make up 25% of investors’ portfolios, mutual funds 13%, bonds 8% and cryptocurrencies 10%, according to Schwab. But cryptocurrency is just one example of the appetite for greater diversification, the survey found.

Forty-five percent of investors said they are interested in owning alternatives (private equity, hedge funds and venture capital), and 33% are interested in event contracts. Forty-seven percent said they expect to increase investments in alternatives over the next 20 years, and 53% said they would invest more in event contracts.

Besides diversifying their portfolios with new asset types, investors are also diversifying their approach across accounts, survey results showed. Thirty-nine percent reported that they maintain a single portfolio for all their goals, while 46% said they prefer multiple portfolios alongside a main account.

Fifty-four percent of those who segment do so to target specific objectives, 38% to experiment with different strategies, 30% to access new products, 29% to actively trade and 26% to invest for fun or personal interests.

As they add more asset types and trade more often, investors recognize that modern portfolios are increasingly sophisticated and may benefit from professional guidance, including 54% of Gen Z, 57% of millennials, 55% of Gen Xers and 59% of baby boomers.

“With more choices and strategies than ever — from crypto to alternatives to more frequent trading — advice can help investors navigate the range of possibilities, make informed decisions and shape portfolios that reflect their goals and appetite for risk,” Rob Williams, head of wealth management research at the Schwab Center for Financial Research, said in the statement.

What Holds Some Investors Back

Fifty-four percent of survey participants who invest said they do so for various reasons: growing their money, saving for retirement and achieving financial independence. Yet many Americans remain hesitant to enter the market.

Forty-nine percent said their biggest barrier to investing is financial; they do not have enough money to get started. Survey participants believe that the typical amount a person needs to begin investing is about $1,000.

In addition, 44% of those who do not invest said they feel nervous or overwhelmed by the process, and 30% cited risk.

“It’s never been a better time to be a retail investor,” Craig said. “With greater access to high-quality platforms and tools, comprehensive educational resources, a wider range of products than ever before, and 24/7 professional support, investors can diversify and personalize their portfolios to match their goals.”