Charles Schwab CEO: Don't try to time the market

The stock market is a long game, not a guessing game.

That’s according to Charles Schwab (SCHW) CEO Rick Wurster, who repeated the adage “it’s about time in the market, as opposed to timing the market” on Yahoo Finance’s Opening Bid.

Wurster explained that clients often call asking if now is the moment to cash out after the market’s relentless climb. In most cases, he pushes back on the urge to jump in and out of stocks.

“The hard part about timing the market is you’ve got to be right twice,” he said. “You’ve got to get out at the right time, and then you’ve got to be able to get back in at the right time, and that’s very hard to do.”

The market’s massive rally has been driven by a handful of Big Tech names known as the “Magnificent Seven.” Strong earnings, hefty cash flows, and surging demand for artificial intelligence have propelled Microsoft (MSFT), Alphabet (GOOG, GOOGL), and Nvidia (NVDA) to record valuations, helping push indexes to new highs.

As of Wednesday, the S&P 500 (^GSPC) is up nearly 13% year to date, while the Nasdaq (^IXIC) has gained over 16%. The Dow Jones Industrial Average (^DJI) has lagged slightly, rising above 8% over the same period.

“Their fundamentals have been so strong,” Wurster said. “There’s real robustness to their businesses. So I think that’s been fueling the market higher, and our clients love it.”

He added that Schwab’s investors are also more active than in recent years. “Our clients are really engaged,” Wurster noted, with trading up 30% compared to last year. Margin balances are at an “all-time high,” he said, and more customers are using options to ride the rally.

That enthusiasm, however, comes with caution.

“I would describe our clients as happy because their balances have never been higher, but a little bit nervous about the elevation of the market,” Wurster said, describing his recent visits to 15 Schwab branches across the country.

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Also on investors’ minds are the Federal Reserve’s next moves, including forthcoming rate cuts. In part, that may be why markets are continuing to hit new highs, Wurster added.

That nervousness isn’t misplaced. RSM chief economist Joe Brusuelas previously told Yahoo Finance that the market’s rally has been unusually concentrated, or what he described as “frothy,” with just a few megacap stocks accounting for much of the gains. If those leaders stumble, the broader indexes could quickly give back ground.

“It wouldn’t be surprising if we have a healthy correction,” Brusuelas said.

Investors are also contending with other risks, including higher-for-longer interest rates, slowing global growth, and geopolitical shocks, such as tariffs. Those factors could weigh on earnings just as valuations are stretched.

For now, Schwab’s clients appear content to ride the wave but are not necessarily chasing performance.

“In a lot of ways, retail investors have led the markets this year,” Wurster said.

Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at francisco.velasquez@yahooinc.com.

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