Investors are divided in their sentiment toward the stock market, according to Charles Schwab’s Q1 2022 Retail Client Sentiment Report of over 1,000 retail clients. Almost half (44%) of respondents have a bearish outlook on the U.S. stock market for the first quarter of 2022, up 9% from the same time last year. Thirty-nine percent of investors are bullish about the first quarter, down from 48% the same time last year. Still, nearly 60% of Schwab retail clients say they feel better off financially compared to a year ago.

“Clients remain cautious toward the stock market given factors like inflation and ongoing uncertainty due to the pandemic, but we continue to see strong client engagement overall. Among retail investors, more than three million new households opened accounts at Schwab and we saw 5.5 million retail daily active trades in 2021 – both up from 2020,” said Jonathan Craig, head of Investor Services at Charles Schwab. “While the pandemic is one of the factors driving higher levels of engagement among individual investors, there are also several longer-term drivers at play including lower investing and trading costs, developments like fractional shares making investing more accessible, and advancements in digital innovation improving the investing experience. All of these make it easier for individuals to invest in their future.”

Young investors, defined as investors under the age of 40, remain the most confident in the market by a small margin with 42% feeling bullish in Q1; however, young investors’ bullish sentiment has dropped nearly 20% since Q2 2021.

Schwab clients are most bullish about the healthcare sector (51%), followed by energy (48%) and information technology (46%). They are most bearish about real estate (37%) and consumer discretionary (32%).

When it comes to their portfolios, 44% of Schwab retail clients plan to add money to their investment portfolio in the first three months of 2022 and 61% say they will adjust their portfolio allocation. Individual stocks (37%), ETFs (30%) and mutual funds (19%) are the most popular investment vehicles, while 16% of Schwab clients say they will invest in cryptocurrency in the first part of 2022.

While half of Schwab retail clients surveyed think now is a good time to invest and the majority (94%) are confident they will reach their financial goals, concerns around inflation (19%), a market correction (14%), and the U.S. political landscape (13%) are top of mind in early 2022. Rounding out investors’ top concerns are the economic impact of COVID-19 and the emergence of additional variants (12%) and the Fed potentially increasing interest rates (8%).

About the survey

This data is collected by Schwab quarterly via an online survey of clients with retail assets of at least $2,000. There is oversampling to achieve adequate sample sizes for sub-group analysis, and then application of a weighting scheme to create a total respondent population that is representative of Schwab’s client base. Q1 study was fielded at the beginning of the quarter: January 5-16, 2022. Detailed results can be found here.

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.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

About The Charles Schwab Corporation

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 33.3 million active brokerage accounts, 2.2 million corporate retirement plan participants, 1.6 million banking accounts, and approximately $7.80 trillion in client assets. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, www.sipc.org), and their 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; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at www.aboutschwab.com.

TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc. are separate but affiliated companies and subsidiaries of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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