E*TRADE Financial, LLC today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors, in which respondents reflected on their 2020 investing decisions:
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- The vast majority are satisfied with their portfolio management. Almost three out of four investors (71%) are satisfied with how they managed their investments this year.
- Most investors are steadfast in their long-term plan. In 2020, the top financial lesson investors learned was to stay the course (50%). This was distantly followed by focusing on strategic market moves (19%) and saving for an emergency fund (15%).
- Digital tools and human advice are not either/or. As the year comes to a close, the number one move self-directed investors plan to make is to use an online tool to review their portfolio (38%), followed by reaching out to an advisor (35%). Further, investors’ top financial resolution for 2021 is to use online tools to diversify their portfolio and help meet goals (33%), followed by seeking the help of an investment professional (30%).
“The year kicked off with a market shock that may define a generation in COVID-19, and as a nation we then experienced a social movement of monumental proportions in the fight for equality, only to cap the year with the most contentious election in modern history,” said Mike Loewengart, Managing Director of Investment Strategy at E*TRADE Financial. “And these next few months may continue to see pronounced volatility as markets balance winter virus woes with vaccine developments. In spite all of this, it’s encouraging to see investors tune out the noise and remain focused on long-term investment goals. In this environment, a properly diversified portfolio across asset classes is a powerful way to help smooth out unpredictable market conditions.”
Mr. Loewengart offered additional insights for investors as they begin the New Year:
- Review and rebalance your portfolio. Major life events like retirement, the birth of a child, or buying a house can vastly change an investor’s financial circumstances. It’s a good habit to review portfolios annually to determine if savings goals and investments are on track. A portfolio rebalance may also be appropriate to help investors stay aligned with their financial goals and risk tolerance.
- Create or refresh a retirement plan. It’s important for investors to revisit retirement plans annually to understand how much they’ll need to accumulate, see where they currently stand, and make any adjustments to stay on track. Investors looking to create a plan may want to speak with their financial advisor or explore IRA selector tools and retirement calculators offered by many online brokers. These digital resources help investors determine what type of account may fit their needs.
- Consider tax loss harvesting. Reviewing 2020 transactions before year-end may help investors identify opportunities to lower their tax bill. Realizing tax losses at year-end may help reduce taxable income. Online brokers offer FAQs, tools, and resources to help investors prepare for tax season. A tax or financial advisor can also help review portfolio gains and losses and advise on moves to make based on an investor’s specific tax situation.
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*TRADE’s trading and investing platforms and tools, visit etrade.com.
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About the Survey
This wave of the survey was conducted from October 1 to October 13 of 2020 among an online US sample of 842 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 Dynata. 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.
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.
E*TRADE Financial, LLC and its affiliates do not provide tax advice, and you should always consult your own tax advisor regarding your personal circumstances before taking any action that may have tax consequences.
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, LLC. ETFC-G
© 2020 E*TRADE Financial, LLC, a business of Morgan Stanley. All rights reserved.
E*TRADE Financial engages Dynata to program, field, and tabulate the study. Dynata provides digital research data and has locations in the Americas, Europe, the Middle East and Asia-Pacific. For more information, please go to www.dynata.com.
In looking back on 2020, would you say you are…with how you managed your investments this year?
Satisfied (Top 2 box)
Dissatisfied (Bottom 2 box)
As we approach the end of the year, which if any, of the following will you complete? (Select all)
Use an online tool to check that my portfolio is properly allocated and is meeting target goals, rebalancing as necessary
Check in with a financial advisor
Sell a stock or stocks that have lost value in order to offset taxes on both gains and income
Make a charitable contribution of stocks, bonds, or cash
Create or refresh my retirement plan
Update my beneficiaries
I don't plan to check on my portfolio at the end of the year
Looking back at 2020, what's one financial lesson you learned?
It's better to stay the course
It's better to strategically move in and out of the market
I need to keep more cash on hand/save for an emergency fund
I need to manage my debt more aggressively
I need to save more for retirement
In 2021, my financial resolution is to...
...use online tools more often to make sure I am properly diversified and meeting my goals
...seek the help of investing professionals when I need it
...increase the amount I contribute to my retirement plan
...change my asset allocation to better reflect market conditions
...learn more about investing, trading, and the markets
...not make any changes to how I am investing