Fewer Traders Have Bearish Outlook Heading Into 2014

  Fewer Traders Have Bearish Outlook Heading Into 2014

Business Wire

SAN FRANCISCO -- December 17, 2013

According to data captured in Charles Schwab’s most recent Trading Services
Sentiment Survey, only 10 percent of traders say they have a bearish outlook
for the next three to six months – the lowest level seen since the survey’s
inception in February 2008, and a notable drop from September 2013 when 15
percent of traders surveyed had a negative short-term outlook.

While the vast majority of traders (90 percent) have a bullish or neutral
near-term market outlook, only 23 percent of traders surveyed say they have
changed their portfolio allocation to include less cash in the past three
months – while one in three indicate they have increased their cash
allocation. And, just 10 percent of respondents report being very confident
that their portfolios are properly hedged against risk.

“While general outlook is more positive than we’ve seen in the past, we
haven’t seen bullish sentiment translate into changes in trading behavior
yet,” said Kelli Keough, Senior Vice President of Trading Services at Charles
Schwab. “The survey results reflect what we’re hearing from our Trading
Services clients – some say they feel the markets are overvalued, so they’re
sitting on cash awaiting a pullback.”

Sector Outlook

Two in five traders (37 percent) indicate they are most bullish on the
technology sector heading into 2014 while nearly 20 percent express the most
confidence in the healthcare sector. Conversely, nearly a quarter of those
surveyed (24 percent) say they are most bearish on utilities. The following is
a breakout of the top three sectors on which traders indicate they are most
bullish and bearish:

                                                      
Most Bullish    Percentage      Most Bearish             Percentage
Technology      37%             Utilities                24%
Healthcare         18%                  Financials                  13%
Energy          13%             Consumer                 11%
                                        Discretionary
                                                                    

New Year’s Trading Resolutions

When asked about their commitment to a trading plan over the last year, more
than half of traders surveyed (63 percent) report sticking closely to their
plan or deviating slightly from time to time, while just five percent report
feeling overwhelmed and deviating from their trading plan. Three in ten
respondents (32 percent) report that they did not develop a trading plan at
all and instead reacted to market conditions to make trading decisions.

“Developing a trading plan, and sticking to it, can help traders lower their
anxiety and keep their trading on track in the New Year and beyond,” said
Randy Frederick, Managing Director of Active Trading and Derivatives, Schwab
Center for Financial Research. “Diversification and a proper asset allocation
plan, setting realistic profit goals and determining proper loss thresholds
are all critical factors for traders looking to devise an individual plan, and
keeping things simple is often the most effective course of action.”

Looking ahead to 2014, 46 percent of traders indicate they intend to devote
more time to trading education as part of their New Year’s trading
resolutions, while 43 percent intend to identify new trading opportunities.
Additionally, about one quarter (28 percent) of participants said they plan to
develop and follow a trading plan.

“The focus on building knowledge in the New Year is particularly noteworthy as
it is a trend that we are already seeing from our clients with record
attendance levels at our live and virtual education events around the
country,” added Keough. “Traders remain focused on the importance of assessing
what’s worked and what hasn’t. They are taking advantage of the education that
is available, and consulting the experts if a course correction is necessary –
all hallmarks of an informed and sophisticated trader.”

Data from the Charles Schwab Trading Services Sentiment Survey were derived
from 781 responses of participants in Charles Schwab’s Trader Education event
that took place on December 3, 2013. More than 550 traders attended the event
in person and more than 1,400 people participated in the live online component
of the event.

Schwab provides traders with superior trading platforms, free seminars and
workshops, online education resources and 24-hour access to experienced
trading specialists, with no minimum trade requirements. For more information,
please visit www.schwab.com/trader or call 888-245-6864.

Follow us on Twitter: @Schwab4Traders

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.

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Disclosures

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, 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; 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. More information is available at www.schwab.com and
www.aboutschwab.com.

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against losses in a declining market.

(1213-8630)

Contact:

Charles Schwab
Erin Montgomery, 212-403-9271
Erin.Montgomery@schwab.com
 
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