E*TRADE Study Reveals Bearish Sentiment at Three-Year High

E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results show that the majority of investors are bearish amid market volatility, gridlock in Washington, and global growth concerns.

  • Bears take the day. Bearish sentiment rose 16 percentage points, to 54%one of the biggest quarterly increases in the past three years.
  • Trade concerns loom large. Nearly three out of five investors feel China and trade tensions pose the most risk to their portfolios (59%), followed by Fed rate hikes (38%), and gridlock in Washington (33%).
  • They feel volatility is the new normal. More than nine out of 10 investors (91%) believe volatility will rise or stay the same in Q1.
  • But the majority still give the economy a passing grade. The majority of surveyed investors (55%) give the economy an A or B grade.
  • Buy the dip mentality still rules. Four out of five investors (79%) say their strategy is to buy the dip, likely to take advantage of recent market volatility. On the other hand, one out of five investors (21%) prefer to sell the rally.

Volatility and concerns of a global slowdown are clearly on the hearts and minds of investors today, said Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. That said, weve seen tremendous momentum over the past few years, and ebbs and flows are a natural part of the market. It wont always go in one direction like it did for many years up until 2018. In the current state of play, its important to remember that, at least for now, our foundation is strongeconomic fundamentals like employment and GDP continue to show resilience.

The survey also explored retail investors views on sector opportunities for the first quarter of 2019:

  • Health care. Half of all surveyed investors see opportunity in health care, which is traditionally viewed as a more defensive sector.
  • Energy. Two out of five investors see opportunity in energy this quarter amid the recent rally in crude oil.
  • IT. This sector dropped two places from the number one spot last quarter as device production slows. Yet it remains a top choice, as investors may be seeking bargains.

E*TRADE aims to enhance the financial independence of traders and investors through a powerful digital offering and professional guidance. To learn more about E*TRADEs trading and investing platforms and tools, visit etrade.com.

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About the Survey This wave of the survey was conducted from January 2 to January 10 of 2019 among an online US sample of 910 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Research Now. 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). The panel is 60% male and 40% female, with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data

About E*TRADE Financial and Important Notices E*TRADE Financial and its subsidiaries provide financial services including brokerage and banking products and services to retail customers. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are national federal savings banks (Members FDIC). 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.

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

2019 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and Research Now are separate companies that are not affiliated. E*TRADE Financial Corporation engages Research Now to program, field, and tabulate the study. Research Now Group, Inc. provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.researchnow.com.

 
When it comes to the current market are you?
    Total
Q119   Q118   Q117   Q116
Bullish 46% 68% 64% 45%
Bearish     54%   32%   36%   55%
 
 

Which of the following risks are you most concerned about when it comes to your portfolio? (Top 2)

    Total
Q119
China and US trade tensions 59%
Fed raising rates 38%
Gridlock in Washington 33%
Weakness in the tech sector 20%
Flattening yield curve 17%
Weakness in the housing market 13%
Brexit 9%
Other 5%
None of these     4%
 
 

Over the next quarter, do you think volatility will…

    Total
Q119
Greatly increase 16%
Somewhat increase 42%
Stay the same 33%
Somewhat decrease 9%
Greatly decrease     0%
 
 

What grade would you give the current state of the U.S. economy right now?

    Total
Q119
A 14%
B 41%
C 32%
D 10%
F     3%
 
 

If you had to choose, would you say your trading strategy is more buy the dip or sell the rally?

    Total
Q119
Buy the dip 79%
Sell the rally     21%
 
 
What industries do you think offer the most potential this quarter? (Top three)
    Q119   Q418   Q318   Q218   Q118
Health care 50% 44% 41% 46% 41%
Energy 40% 42% 43% 41% 47%
Information technology 38% 49% 45% 44% 45%
Financials 36% 40% 41% 40% 43%
Consumer staples 30% 21% 19% 24% 17%
Utilities 29% 23% 24% 22% 19%
Communications services 23% 21% 27% 24% 23%
Industrials 20% 21% 22% 22% 29%
Consumer discretionary 17% 22% 19% 18% 15%
Materials     16%   17%   20%   20%   21%
 

E*TRADE Media Relations
646-521-4418
[email protected]

E*TRADE Investor Relations
646-521-4406
[email protected]

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