A vision for tomorrow

October 3, 2023 Matthew Wright
Since 1973, our investors have used lessons learned to build a sound financial future.
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You can learn a lot in 50 years. But as Charles Schwab marks this significant milestone, we’re not dwelling on the past. We’re focusing on the insights we’ve learned over 50 years in business—and how they build a foundation for a successful financial future.

And as we look forward, who better to offer tried-and-true advice than our clients? So we interviewed over 3,000 of them, spanning all demographics—from long-standing clients to brand-new investors. Our goal? To have investors learn from each other’s stories and maybe teach us something too.

Many of our clients’ tips echoed familiar best practices: Start investing early. Take full advantage of compound interest and employer contributions. Don’t chase a rallying investment or catch a falling knife. But others were less conventional. Here are three of the most impactful takeaways:

1. The most valuable asset is time

Investing as early in life as possible—no matter how small the amount—means more years to benefit from compounding growth. It may also lead to a more confident and enjoyable approach to portfolio management. Of longer-tenured investors (those opening accounts before 2000), 86% 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.

“Patience and a long view pay off,” said one respondent. “We all get older. We all have future needs. And the long-view approach to investing in a diversified portfolio is a proven successful strategy to meeting our needs and enjoying the fruits of our savings.”

“After four volatility events in my investing life, I saw firsthand that patience is a winning strategy,” another recalled.

2. Short-term trends won’t make or break your investing strategy.

Our research shows that life experiences impact investing style, including risk tolerance. Millennials—who endured the Great Recession in young adulthood—tend to be more cautious than baby boomers, who largely enjoyed financial stability in their young adult years. Younger investors may also be more cautious due to rising tuition costs and employment trends, like more frequent job-hopping and perceived insecurity in traditional salaried roles.

The good news is younger generations aren’t reluctant to ask for help. More than half of millennials and Gen Xers feel more comfortable working with a financial advisor now versus when they began investing. This compares to 47% of baby boomers and only 40% of those born before 1945.

But regardless of generation, the majority of our clients advised staying focused on the long game. Overall, more than nine in ten investors described themselves as more like a tortoise than a hare—deliberate and steady, and one-third said patience through volatility contributed most to their investing success.

“Don’t worry about economic downturns when you’re young. You’ll have time to recover those losses.” Or as another respondent put it: “Invest regularly and turn off the news when a bear market starts.”

3. Learning to invest can be life changing.

Innovative technology, growing competition among firms, and increased democratization have revolutionized the investing landscape during the last half-century. According to an April 2023 Gallup poll, 61% of Americans currently own stock (including 401(k)s and mutual funds)—the highest figure since 2008.

And that commitment to investing leads to a deep sense of pride. On average, 70% percent of respondents to the Schwab survey said they feel proud of what they’ve accomplished in their investing. Our respondents also cite the value of continuing to learn and of passing on investment tips to others. When asked which asset they wish they had more of when they first started investing, 59% said knowledge.

“Be willing to learn from people who have been successful,” one respondent said. “But also be skeptical of people who claim to be successful without proof.”

Ultimately, your lessons learned will guide you as well. As another client added, “Knowledge is power. Wisdom is the tool you use to execute the knowledge.”

Empowering investors at every step

Investing is a lifelong journey. Yet it’s like any other skill—with each new experience, you gain more confidence and patience to weather market pullbacks and economic volatility.

After 50 years of walking alongside our clients on their financial journeys, we at Schwab forge ahead with optimism. We know the road ahead holds both challenges and opportunities. And, illuminated by lessons of the past, we look forward to continuing that journey together.