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.
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."
