Most active traders are still somewhat optimistic that the stock market will recoup recent losses before the end of the year, according to a Charles Schwab survey released today. However, a majority of those same traders say the government isn't doing enough.
The latest Charles Schwab Active Trader Sentiment Survey polled nearly 475 individual investors who trade frequently (at least 36 times per year) and asked them to grade elected government officials on their pursuit of policies that encourage investing. Very few respondents gave them high rankings:
Only 13% of respondents gave the government a grade of "A" or "B"
More than half (53%) gave the government a grade of "C" or "D"
One-third (33%) gave the government a grade of "F"
Despite political skepticism, most respondents believe the stock market could rally before the end of the year. An estimated 72% of traders predict the S&P 500 will finish 2011 either flat or with an overall gain. However, only 25% of traders describe themselves as having a bullish outlook, compared with 47% who said the same thing in May.
Data from the Charles Schwab Active Trader Sentiment Survey were derived from responses of 473 active traders collected early this month and analyzed by Directive Analytics Data.
Other key findings of the survey include:
Traders are most bullish on the technology sector (42%), distantly followed by materials (17%) and consumer discretionary (11%).
Only 10% say they are very confident their portfolio is properly hedged against risk.
Nearly half (46%) own foreign stocks, but 64% believe the U.S. is the most appealing market in the current environment, followed by China (13%), Brazil (11%) and India (5%).
"Despite disappointment in the government and its pursuit of investing policies, active traders still believe there are opportunities in the market," said Kelli Keough, vice president of active trading at Charles Schwab.
Keough noted that the latest results of the Schwab Survey of Investor Confidence, a separate survey which examines the views of Schwab retail investors each quarter, echoes the same sentiments. Online interviews with 1,033 Schwab Investor Services clients were conducted on September 8 to 23 by global market research firm Synovate.
In that poll, 43% of active traders included in the sample say it's a good time to invest in equities and 46% say they have a high level of confidence in their ability to make investment decisions.
"Active traders remain highly engaged, and whether the investing waters are calm or rough, our goal is to empower our clients to make the best trading decisions possible. We continue to enhance the tools and resources we offer clients to help them navigate the market,'" Keough said.