Active Traders Show Market Optimism

The latest Charles Schwab Active Trader Sentiment Survey found that 72% of traders who are expecting a tax refund this year plan on investing at least some of it.

More than a quarter of respondents (28%) say they will put the entire refund into their investment portfolios.  

According to a press release, overall optimism about market conditions hit its highest level since the end of 2009. Nearly half of those traders surveyed (47%) said they are currently bullish, compared to 38% last November and up from just 28% in April 2010.   

Optimism about the market appears to be pushing traders into action. One in four (25%) recently changed their portfolio allocation to include less cash. And more than two-thirds (69%) plan to make more than 36 trades this year.   

More than three quarters (77%) consider market volatility a friend versus a foe, up from 71% in November 2010.  

Traders surveyed are most bullish on the technology sector (36%), followed by materials (26%) and financials (13%). Only 4% of traders said the energy sector looked most promising to them and just 1% identified commodities as the sector they were optimistic about.   

Roughly half (49%) of respondents own foreign stocks mostly through American Depository Reciepts (ADRs) or Exchange Traded Funds (ETFs), down from 56% in November, possibly reflecting the crisis in Japan and continued unrest in the Middle East.   

Traders said an easy-to-use trading platform (26%) was most important to them, followed closely by access to research (25%) and cost (20%).   

Charles Schwab surveyed 653 active traders and investors (those who trade at least 36 times per year) from March – April 2011.