Cautious Optimism in Face of Last Week's Market Downturn: But Schwab Poll Finds a Greater Interest in Seeking Investment Advice.

SAN FRANCISCO, April 19 /PRNewswire/ --

A Harris Poll of Charles Schwab & Co., Inc. customers completed the evening of Monday April 17th, found that 92% remain comfortable with their investment approach compared to 94% on April 5, 2000, and only 12% felt the recent volatility has shaken their long-term confidence in the stock market. However, compared to a similar survey fielded on April 5th following that week's volatile market, more respondents reported that they were seeking advice from their broker (49% compared to 40%) or a financial advisor (57% compared to 43%).

"Investor confidence in the strength of the economy and their outlook on the markets were not significantly shaken by recent events," said David Pottruck, Schwab President and Co-CEO. "But these results also show that in times of volatility and increased uncertainty, many investors don't want to go it alone. They want help and advice from a trusted source, whether that is their broker or another financial advisor."

Respondents expressed optimism about the markets over the next six months, and, in fact, reported being net buyers during last week's market downturn. Among those who made any changes to their portfolio, 65% reported buying stock, 47% reported selling stock.

WHAT THEY DID

71% of those surveyed did not make major changes to their investment portfolio during the market collapse of the preceding week. Only 5% reported making major changes and a quarter (24%) made minor changes. For those investors who did make changes, the balance was towards stock buying (65% reported buying stocks, 47% reported selling). This represented a directional shift from the week of April 3rd, when 79% of investors who made changes were buyers of stock and only 35% were sellers. Last week, nearly a quarter (23%) shifted asset to money market funds or other cash equivalents, up modestly from earlier in April (18%).

MARKET EVALUATION

When assessing the current market conditions, there was very little change from early April. Customers remain generally confident about equities. A full 95% believe the stock market continues to be the best place for long term investing, 98% say they have come to expect occasional market corrections. Respondents were almost equally optimistic about the performance of the Dow and Nasdaq for the next six months, 66% thinking the Dow will increase from current levels and 62% saying the Nasdaq will increase.

REASONS FOR MARKET CORRECTION

The three most frequently cited reasons for last week's market drop were "overvalued tech stock prices," "overvalued stock prices in general," and "an emotional reaction by investors."

-- Overvalued tech stocks (78% -- up from 65% of respondents on April

5th);

-- Overvalued stocks in general (71% -- up from 57%); and

-- An emotional response (59% -- not asked in April 5th survey).

Expressing some lingering concerns about the technology sector of the market, over half (57%) of the survey respondents feel that tech stocks continue to be overvalued despite the market drop last week; less than a tenth feel they are undervalued (8%); and close to a third (29%) feel that tech stocks are priced "about right."

Internet Usage

Over 83% of survey respondents report accessing the internet for investing purposes: 70% report using it to trade, 78% to track their portfolio, and 76% to research investments. According to respondents, the internet is used far more frequently to monitor investments than to trade. When asked how often they use the internet for these purposes, a large majority (67%) reported using the internet daily to track their portfolio, while only 15% report using it to trade daily. More than two-thirds (68%) reported using the internet less frequently than weekly to trade.

The telephone survey was conducted Monday evening by The Harris Poll for Schwab among a random selection of 417 Schwab customers with at least $5,000 in equity or at least one trade placed in the past year.

Charles Schwab & Co., Inc. (Member SIPC/NYSE) serves over 6.9 million active investor accounts with $823 billion in investor assets. Schwab provides a full-service investing experience to customers through a "clicks and mortar" multi-dimensional offering of the Internet, 356 branch offices, speech recognition, touch-tone telephone, e-mail technologies, multilingual and international services, and access to professionals day or night. About 30% of Schwab's customer assets and 10% of its customer accounts are managed by the 5,800 independent, fee-based investment advisors served through its Schwab Institutional division.

Schwab, its affiliates, and/or its employees and/or directors may have positions in securities referenced herein, and may, as principal or agent, buy from or sell to customers. Schwab, its affiliates, or consultants may perform or solicit investment banking or other services from any company mentioned in this material.