October 30, 2015

Almost Half of Investors Surveyed Expect Market Downturn, According to Latest E*TRADE Study

Bearish sentiment rises while nearly half of investors expect the market to drop at least 10 percent by end of year

NEW YORK--(BUSINESS WIRE)-- E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of StreetWise, E*TRADE's quarterly tracking study of experienced investors. Results indicate investors are increasingly wary about what direction the market may take during the remainder of the year:

  • More than any other, investors choose "Dazed and Confused" as the movie title that best describes how they feel about the market today, and significantly more investors chose it this quarter over last.
  • Investors are more bearish than any quarter in the past two years, now at half the survey population.
  • Nearly half of all investors believe the U.S. equity market will experience a correction (drop of at least 10 percent) or a bear market (drop of at least 20 percent) by end of year.

"After an exceptionally long bull market, investors may be bracing for the tide to turn," commented Michael Loewengart, VP, Investment Strategy at E*TRADE Financial. "Fortunately, there are a series of smart moves investors can consider in the event of a market shift."

Mr. Loewengart offered the following general insights for investors concerned about a market downturn heading into the end of the year.

  • Dollar-cost averaging can reduce cost basis. Dollar-cost averaging is an investment approach in which investors set a defined schedule for buying into the markets. Weaker markets allow investors to buy more shares when prices are low, and fewer when they are high, enabling investors to potentially reduce the average cost basis.
  • Diversification can help weather storms. Well-diversified portfolios may be better positioned for changing market conditions, as some industries and instruments tend to be particularly hard hit during market downturns.
  • Timing the market is difficult. While the current macro environment may paint a picture of global uncertainty, knee-jerk reactions rarely achieve the intended results. Market swings are common, and investors are wise to stay focused on the long term.

Visit E*TRADE's Newsroom for the full Q415 StreetWise study results.

E*TRADE helps investors balance today's needs with tomorrow's goals, through pioneering digital tools and personalized, smart guidance online and from seasoned financial consultants. To learn more about E*TRADE's trading and investing platforms and tools, visit etrade.com.

For useful insight from E*TRADE and third-party investment professionals, follow the company on Twitter, @ETRADE.

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services, including online brokerage and banking products and services to retail customers. Specific business segments include Trading and Investing and Balance Sheet Management. Securities products and services, including stocks, bonds, mutual funds, options, and ETFs are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, an investment adviser registered with the Securities and Exchange Commission. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries and affiliates. More information is available at www.etrade.com.

The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Dollar-cost averaging does not assure a profit nor protect against a loss in declining markets. Since such a plan involves continuous investment in securities regardless of fluctuating prices, an investor should consider his or her financial ability to continue purchases through periods of low price levels. ETFC-G

About ResearchNow

ResearchNow, a leading digital data collection provider, powers market research insights. They enable companies to listen to and interact with the world's consumers and business professionals through online panels, as well as mobile, digital, and social media technologies. Their team operates in over 20 offices globally and is recognized as the market research industry's leader in client satisfaction. They foster a socially-responsible culture by empowering their employees to give back. To find out more or begin a conversation, visit www.researchnow.com.

About the Survey

This wave of the survey was conducted from October 1 to October 6 of 2015 among an online U.S. sample of 1000 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.1 percent at the 95 percent confidence level. It was fielded and administered by ResearchNow. The tracking study fields quarterly at the beginning of each quarter and does not reflect data from the complete quarter. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month) investors. The panel is 65 percent male and 35 percent female with an even distribution across online brokerages, geographic regions, and age bands.

 

Referenced Data

 
If you had to pick a movie title that best describes how you personally feel about the market right now, which would it be?
 
  Q415 Q315 Q215 Q115 Q414
Dazed and Confused 38% 29% 25% 27% 27%
Easy Rider 18% 20% 26% 25% 23%
Pulp Fiction 12% 14% 14% 13% 14%
Singin' in the Rain 9% 13% 14% 14% 13%
Fear and Loathing in Las Vegas 7% 8% 6% 6% 7%
Raging Bull 5% 6% 8% 7% 8%
Jackass 6% 6% 5% 6% 4%
Apocalypse Now 4% 5% 3% 3% 4%
           
When it comes to the current market are you?
  Q415 Q315 Q215 Q115 Q414
Bullish 50% 56% 59% 66% 59%
Bearish 50% 44% 41% 34% 41%
 
Which of the following do you think is most likely to occur in the next three months? The U.S. equity market will
 
  Q415 Q315 Q215 Q115 Q414
Experience a correction (drop of 10% or more) 32% 39% 34% 39% 39%
Experience a bear market (drop of 20% or more)

**answer included beginning in Q415**

16% - - - -
Rise 22% 22% 29% 31% 29%
Stay basically where it is 30% 39% 37% 31% 32%
 

Important Notices

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation.

© 2015 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and ResearchNow are separate companies that are not affiliated. E*TRADE Financial Corporation engages ResearchNow to program, field, and tabulate the study.

E*TRADE Media Relations
Thayer Fox, 646-521-4418
thayer.fox@etrade.com
or
E*TRADE Investor Relations
Brett Goodman, 646-521-4406
brett.goodman@etrade.com

 

Source: E*TRADE Financial Corporation

 

 

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