Active traders are planning to invest most of their tax refunds in the stock market, according to new data by Charles Schwab.
The latest Charles Schwab Active Trader Sentiment Survey polled 421 individual investors who trade frequently (at least 36 times per year) and found that 51 percent of respondents now consider themselves bullish, the highest level since Schwab first began tracing active trader sentiment in April 2008. This compares to just 25 percent in October 2011. Only 14 percent say they are bearish.
Roughly three-quarters of those expecting a tax refund this year plan on investing at least some of it. More than half of respondents, 53 percent, said they will invest most of their refund into the stock market, nearly doubling last year’s number of 28 percent.
The survey also found that traders are most bullish on technology, 37 percent, and energy, 31 percent. Only 9 percent favor financials and even fewer are optimistic about health care, minerals and consumer discretionary stocks.
When asked what issues concern them most, 29 percent of respondents said the European debt crisis, 23 percent said unemployment and 20 percent said the depressed housing market. Only 8 percent identified energy prices as a top concern.
“With major indices nearing record highs, our active trader client base is becoming increasingly optimistic,” said Kelli Keough, vice president of active trading at Charles Schwab. “As confidence improves and these bullish traders more eagerly embrace the market, we are seeing them adopt trading strategies that can help them manage risk and generate income.”
The Charles Schwab Corporation is a leading provider of financial services, with more than 300 offices and 8.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 794,000 banking accounts, and $1.81 trillion in client assets as of Feb. 29, 2012.