You're watching...
Ameritrade President Tom Bradley argues stocks are the best investment despite investors becoming more risk-averse.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Let's say you gotta be in it to winning a new survey from TD Ameritrade shows the current state of the economy.
Is making investors even more hesitant about risking their money in the market.
One in three investors now say they are less likely to jump in the game since the recession joining me now for Fox Business.
President and retail to add retail distribution for TD Ameritrade thanks so much for joining me today my pleasure -- -- so this is why care about this and this is why -- to -- this segment because investors have pulled 102 billion dollars out of stock funds in the past year.
And in that time the Dow has gone up 7%.
So while viewers have pulled their money out because they're scared and it seems like a -- rational thing to do.
They'd missed a 7% return and you haven't gotten that in cash and haven't gotten out on your house he certainly haven't gotten in treasuries.
You know -- it just it's it's people are scared and the -- -- right.
It will look what at what's happened since the market hit bottom in march of 2009.
The markets up over a 110%.
Share from that point so all the folks hinted at Rand for cash.
Missed out on that opportunity as well -- so I'm trying to eliminate risk from a portfolio is one of the biggest mistakes in investing can make.
Would an investor needs to do is they need to properly assess their risk profile.
And match that up with a diversified portfolio securities.
But it's hard not to run when you get hammered -- mean when you watch your assets evaporate.
In the market you watch that huge crash.
You wanna run from the sidelines what are people telling you about avoiding risk what are what's the main thing that scaring them what -- finding your study by actually with what's it would seems to be it's scaring folks today is what's going on in Europe fiscal situation in Europe.
And also the situation in the United States our fiscal situation -- situation in Washington.
They're concerned that that gridlock will -- no matter what happens in November.
Right if we whoever gets in -- -- office -- whatever team gets into office will they be able to get anything done.
The unemployment rate that's what people are concerned about the -- what's tough -- -- -- Now I play devil's advocate is obviously your broker your TTD Ameritrade you make money when people are in the markets -- want them in the market right.
Wolf what we do of course that's our business.
But it is proven over time that stocks provide the best returns over and above any of the types of returns treasury bonds commodities.
Over the long run stocks are the place to be and what we're finding actually use this difficult period that we've gone through has created a much smarter investor.
The for example approximately 35%.
Of our trees per day.
Our derivative -- derivatives mostly options trades.
What's happening is folks aren't our.
Being educated using options to protect the downside to portfolios and to generate more income for -- so they've gotten more sophisticated -- -- hard to believe that when people are scared they've gotten more sophisticated really well they have that's correct yes now what.
Does -- we -- see folks sitting on the sidelines or are some that have been here in the headlights syndrome adolescent it.
All -- been educated but more and more investors are becoming -- so what about FaceBook what about the flash crash what about seeing things like Knight capital.
You know when they see computers entering the market electronic trading algorithms having a big impact on the market today feel like this system is rigged against them when they see things like we we did not see them in the -- -- -- even a blip in the area.
-- -- -- -- It's it just was not top of mine I guess some of the of the things that are going on are really having more of an affect our I think everybody and really they've been.
They've been shielded from most of those things he has you know when I first got into the business 26 years ago the average commission per trade in the discount side was almost seventy dollars -- Today it's nine or ten dollars and it's under ten dollar to trade.
So I think investors recognize that.
That -- they benefited from that and it's must more much more cost effective than it is suing transaction we know if you look at the numbers it proves that jumping out of the market is sitting on the sidelines it during this period has not paid -- -- -- was not necessarily the right decision but avoiding risk at the same time.
You know there there's something in the middle that makes sense maybe it's you don't take flyers and IPOs -- one of the Smart lessons that remarked.
That the smartest lesson is that if you see.
A lot of froth of it looks like it might -- of you might be in the middle of a bubble the step back it's a red -- step back take a deep breath.
Re assess -- risk profile and make sure that you have.
A well diversified portfolio of security and that -- when things could and you don't panic make a bad decision hop on the sideline in this the return for our eight.
Well Tom Bradley thanks for joining us thanks -- --
