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 Chairman Charles R. Schwab |
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Perspective on the Financial Markets and Your Financial Security at Schwab I know that every household in the country is having serious conversations about the stock market and is concerned about what is next and how soon things will return to normal. The situation is unsettling for everyone, and it is extremely hard for most people to sift through all the information out there and make decisions about what to do for the long term. Indeed this is one the most challenging financial environments for investors I’ve experienced in my career. But the history of past market cycles tells us that things will improve. This is the 9th major market downturn that I have experienced. One of the earliest came just as I was starting Schwab in the early 1970s. It took a lot of faith and confidence to see it through, but now, over 30 years later and after several market set-backs since then, I’ve seen the market grow several fold. I try to remember that time whenever the markets look bleak. It’s one example of our economy’s ability to bounce back and have the markets recover. I thought about it during the 1987 crash, and again when the dot com bubble burst in 2000. Thinking back on that first down market in my investing career helps put each new one in perspective. I would never follow the naysayers. Markets do return—it just takes time. I can’t say when that will happen exactly. No one can. In the last few days we’ve seen both up and down markets indicating that some investors may be reassessing their risk daily. There are still some major challenges out there . . . an injured economy, credit and mortgage troubles, the uncertainty of an election. But our economic system is resilient. It will hold up through all these strains. We will come together as a nation and reestablish stability. That process is already underway. It’s messy to see the fixes being made, but they are happening. Soon we’ll feel the effects of the full force of the emergency help from the Treasury and Federal Reserve. I know this is a very tough emotional roller coaster for everyone. We’re talking about money. . . maybe even your life savings . . . not just a minor headache. So what do I say when people ask what they should be doing now with their savings and investments? I say don’t do anything rash . . . stick with your investing plan. That approach has paid off in the past and I’m confident it will again in the future. But that may seem easy to say and harder to do for many of you and I know there is no piece of advice that applies to everyone. Each of us has our own timeframe and our own comfort level with risk. I also say, don’t ride the roller coaster alone. There are people you can trust to help you find your way through this. Reach out to your most trusted advisors to get reassurance about your personal situation. Every one of us approaches these periods differently. This is the time to talk about your particular concerns with someone you trust. Ask questions. Share your opinions and concerns, get their advice. The bottom line is that it’s not hopeless, there are things you can do. And as a nation, we will get through this and come out healthy and strong at the other end. Financial Security at SchwabI would also like to offer some perspective on Schwab’s stability and strength.I can assure you that Schwab is financially strong, that we are absolutely confident in our continued financial health, and that we take appropriate precautions to give you peace of mind about the security of your money here. We are dedicated to the principles of safety and soundness as they form the heart of our relationship with you.
Is this a tough environment? Yes. Everyone, businesses and individuals, feels the effects of this difficult credit market, no one is immune to it. But because we’ve managed our business carefully and because of the confidence and trust that you—our clients—have placed in us, our business has performed exceedingly well, and remains strong. As the founder and chairman of this company and a client with my own assets here at Schwab, I want to reassure you there is no other place I would feel more comfortable with my money funds and diversified investment portfolio. I hope this perspective on the current situation is helpful, but please contact us if you would like additional insight or help, either on the phone or at one of our branch offices. We are here to help. Sincerely,  Chuck Schwab |
