Experienced Investors Point to Timeless Principles as Keys to Long-term Investing Success and Satisfaction

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Schwab's Wisdom of the Crowd Study Finds Long-term Investors Benefit Most from a Disciplined and Patient Approach

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• Long-term investors believe that persistence, diversification, early and regular investing, investing through different cycles, and sticking with a plan are key to success.
• 86% of investors who've been active since before 2000 don't let emotions affect their investments now.
• Investors who've been in the market the longest are having more fun with their investments now than when they first started.
• 80% of investors who began in the 1980s or earlier are proud of their accomplishments as an investor.
• Nearly nine in ten investors described themselves as more like a tortoise than a hare - deliberate and steady.
• More than three-quarters of investors said that if they could only use one investment product for the rest of their lives, it would be a broad market index fund.
• One-third of investors said patience through volatility contributed most to their investing success.

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Schwab's Wisdom of the Crowd Study Finds Long-term Investors Benefit Most from a Disciplined and Patient Approach

WESTLAKE, Texas--(BUSINESS WIRE)-- Charles Schwab today released results from a comprehensive survey of investors that provides helpful insights into the habits and experiences of its clients and what clients see as critical to their satisfaction and successful outcomes. Among the study’s findings is a strong belief from its more seasoned investors that timeless investing principles such as persistence, diversification, early and regular investing, investing through different cycles, and sticking with a plan – are keys to their success.

Charles Schwab, Founder & Co-Chairman. (Photo: Business Wire)

“I hear regularly from clients, many who started with us at the beginning – forty, even fifty years ago – and they tell me that, more than anything, discipline, patience and learning from the occasional mistake pay off and have brought them a financial freedom they could only have dreamed of,” said Schwab founder and co-chairman Charles Schwab. “Fifty years of experience shows us that diligent investors reap consistent rewards and really are the smart money.”

Conducted to commemorate the firm’s 50^th anniversary, The Wisdom of the Crowd surveyed more than 3,000 Schwab clients, ranging from its most seasoned clients who opened their accounts in Schwab’s earliest days to those who have just recently ventured into investing.

Consistent investing principles

When asked to share the lessons they’ve learned over time, investors who have been at it the longest pointed to concepts such as consistency and discipline as core to their success and lack of research and bad timing as central to their unsuccessful outings. These investors offered relatively consistent advice for those newer to investing, such as:

• “Long-term viewpoints are crucial to sticking to a plan when everything seems to be down and the selling seems relentless. If you stick to your plan you will do extremely well over long periods of time.”
• “Be realistic. Be patient. Don’t get emotional. Diversify, diversify, diversify.”
• “Align investments with your personal goals in mind; retirement, college, new house, etc.”
• “Consistency is very big in investing. Even a small amount will grow if you add to it on a consistent basis.”

“Fifty years of experience working with tens of millions of clients provides an invaluable window into what works best for investors,” said Jonathan Craig, managing director and head of Schwab Investor Services. “We know that staying in the market longer pays off, but were eager to hear directly from clients about the lessons they’ve learned along the way and to understand differences for those who’ve been at it longer and those newer to investing. Seeing the wisdom in a principled approach from our most experienced investors made a ton of sense to us. But we were pleasantly surprised to see that kind of thinking also reflected in large portions of investors across the entire age and experience spectrum.”

Time and patience are virtues

The survey reinforced that one of the most valuable assets successful investors possess has nothing to do with money – it is time. The length of time investors have been active is among the most important factors influencing how they navigate, fare in, and feel towards the markets. The survey found that:

• The vast majority (86%) of investors who’ve been at it since before 2000 said they don’t let their emotions get in the way of their investments now, as compared to when they first started investing.
• Investors who have been in the market the longest are also the investors who are having the most fun: 63% of those who’ve been investing since 1980 said they are having more fun with their investments now than when they first started, while only 55% of the newest investors said the same.
• More experienced investors also have more pride: 80% of investors who began in the 1980s or earlier are proud of their accomplishments as an investor.

Investors are really good at tuning out the noise

While there were some differences depending on how long investors had been at it, what they have in common reveals that decades of consistent investor education is working: rather than fall prey to emotions, distractions and hyped promises of performance, investors at every stage are remarkably disciplined:

• Nearly nine in ten investors described themselves as more like a tortoise than a hare – deliberate and steady.
• Nearly nine in ten said if they were given $100,000 today, they’d limit risk and potential short-term gains to focus on slower but steady long-term growth.
• More than three-quarters of investors said that if they could only use one investment product for the rest of their lives, it would be a broad market index fund.
• One-third said patience through volatility contributed most to their investing success.

Generational experiences also shape investor attitudes and behaviors

Some behavioral differences emerged between those who have been investing for two decades or more and those with less experience. For example, seasoned investors reported a steadier personal engagement in investing, but on the flip side are less inclined to react to market moves:

Investors who…	opened account before 2000	opened account after 2000
Identify as self-directed	67%	56%
Check investments often/regularly and get involved in investment decisions	62%	50%
Do nothing in the face of a market downswing (i.e., neither buy nor sell)	56%	46%

And digging one step deeper, Schwab’s survey suggests that Gen X and Millennials tend to be more sensitive to market moves than Boomers, and more likely to act in the face of market volatility:

Investors who…	Millennials	Gen X	Boomers
Would buy or sell in an up market	42%	42%	36%
Would buy or sell in a down market	62%	56%	47%

“The past 30 years have seen significant economic upheaval, the effects of which have disproportionately fallen on younger cohorts,” said Mark Riepe, managing director and head of the Schwab Center for Financial Research. “Economic events, combined with factors like the rise of student debt, the decline of pensions, and persistent political uncertainty, have naturally shaped how investors engage with the markets. It’s important to learn from your experiences, but you want to learn the right lessons. It’s especially important to avoid overreacting – if you do, you risk becoming a prisoner of your own experiences.”

This insecurity and uncertainty may have a silver lining, however: Millennials and Gen X are more inclined towards collaboration and communication when it comes to investing:

Investors who…	Millennials	Gen X	Boomers
Feel more comfortable working with a financial advisor now than when they began investing	50%	53%	47%
Discuss investing with their families more now than when they began investing	75%	74%	62%

Millennials also embrace their role as the influencer generation. Paradoxically, however, they’re also highly skeptical of the tips they receive from others:

• Nearly half of Millennials (45%) said they’ve given an investment recommendation.
• Just 46% said they invested based on a tip, compared to 51% of Gen X and 52% of Boomers.
• Only two in five (39%) Millennials said they’ve lost money investing based on a tip.

Paying it forward

Most respondents (59%) said they wish they had more knowledge when they first started investing – and the data suggests that they are working to close that gap for others. Forty-eight percent of respondents said they’ve inspired someone to start investing, and 38% have taught someone else how to invest. More than a third (35%) have opened or helped open an investment account for someone else.

“During the past 50 years, we’ve seen the markets become increasingly democratized, with more people learning about investing, participating and realizing its benefits,” said Jonathan Craig. “It’s incredibly satisfying to see so many clients rightly feel proud of what they’ve accomplished, practicing the time-tested principles that contribute to their success and eager to share what they’ve learned with others.”

For additional findings, please read the full study here. More information, client stories and content can be found here.

To learn more about how 50 years of experience and the accumulated wisdom of the long-term view can help you as an investor today, please call, drop by a branch or visit Schwab.com.

About this study

THE WISDOM OF THE CROWD was a survey conducted for Charles Schwab by Logica Research.* The 15-minute survey, conducted from May 1 through 15, 2023, polled 3,006 Schwab investors aged 18 and older.

* Logica Research is neither affiliated with, nor employed by, Charles Schwab & Co., Inc.

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 aboutschwab.com. Follow us on Twitter, Facebook, YouTube, and LinkedIn.

Disclosures

Investing involves risk including loss of principal.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request.

(1023-3BSL)

View source version on businesswire.com: https://www.businesswire.com/news/home/20231004229740/en/

Alison Wertheim

Charles Schwab

(415) 667-0475

alison.wertheim@schwab.com

Source: The Charles Schwab Corporation