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TheStreet Open House

Investors Remain Focused On Long-Term Goals

More than three in five investors believe a market correction will occur in the next nine months, but nearly half (49 percent) think now is a good time to invest in equities, and 70 percent say they are engaged in managing their money. The latest findings on client sentiment by Charles Schwab, one of the country’s largest investment services firms with more than $2.08 trillion in client assets*, reflect continued engagement in the stock market and a sense that investors remain focused on the importance of long-term investing.

“While our clients understand that short-term market swings and political drama may cause discomfort in the short-term, these events are not catalysts for knee-jerk reactions when it comes to their portfolios,” said Rodney Prezeau, senior vice president of client experience, Charles Schwab & Co. “Many of our clients prefer to keep one hand on the wheel when it comes to their finances, so we’re having more conversations with clients and that appears to be boosting their confidence levels. In fact, our survey showed that 70 percent feel most confident when they have ongoing or periodic advice from an advisor, rather than flying solo or completely delegating their financial decisions.”

Schwab’s Q3 Investor Sentiment Survey, which polled more than 1,000 retail clients between September 6 and September 18, 2013, showed only 15 percent shifted their investing philosophy from the prior quarter.

“The government shutdown has certainly led to some frustration for clients, but fortunately, most recognize how important it is to not overreact to daily headlines. That’s not to say clients aren’t carefully adjusting their strategies – we’re working with them in a variety of ways to fine-tune their portfolios and keep them on track,” Prezeau said.

According to the survey, clients took the following actions with their portfolios during the past three months:

  • 26 percent rebalanced their portfolios, two percent less than in Q2
  • 17 percent moved money into cash, a one percent drop from Q2
  • Nine percent moved money into fixed income, the same number as the prior quarter
  • Seven percent moved to the sidelines, compared with nine percent in Q2
  • Four percent moved into gold and other commodities, two percent more than in Q2

In addition, 40 percent of clients indicated that their investing strategies are not influenced by factors such as stock market performance, the interest rate environment and other short-term economic metrics, reinforcing the notion that investors are increasingly focused on positioning themselves to reach long-term financial goals over short-term gains.

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