About 1,900 registered investment adivsors are congregating at IMPACT, Charles Schwab’s annual conference, where industry experts and analysts converged to share ideas about the market environment and shifting habits in investing.
For instance, investors are still entrenched in defensive plays, with health care stocks as one of the best performers so far this year, but it won’t last.
“We’re going to start seeing those companies that will be more aggressive in capex. That should be the natural cycle,” Omar Aguilar, chief investment officer for equities at Charles Schwab, said on CNBC at the Schwab IMPACT 2013 conference. “So far investors seem to be rewarding companies that are more conservative. As we go into next year, that’s going to change.”
Looking ahead, Aguilar cautions that political drama on Capitol Hill and stretched valuations could hinder further market gains.
“The more we go up the closer we’ll get to a correction,” Aguilar added.
On Monday, Lizz Ann Sonders, chief investment strategist at Charles Schwab, warned that retail investors are beginning to become more confident as institutional investors are growing fearful, which have historically led to market tops.
“I would like to see a bit of a pullback here,” Sonders said at the conference, CNBC reports. “Fun as (melt-ups) might be, they don’t tend to end well.”
The Schwab IMPACT survey also revealed trends within the advisory community. According to a survey of over 800 RIAs, 55% of advisors say top firms will have to offer low-cost index funds, like mutual funds and ETFs, to attract business. Respondents also believe social media is also becoming a key marketing component for driving new businesses.