Yahoo Finance

Welcome to a new episode of the opening bid podcast. I'm Yahoo Finance executive editor Brian Sai. Like I always say, this is the podcast that will make you a smarter investor, period. And of course, this podcast is sponsored or sponsored by our friends over atVanguard, uh, I'm really jazzed up about this next episode, uh, because it is May 1st when I'm doing this. It is National Investing Day, and the company that has ushered this in, finally, erm, please, it is Charles Schwab, Charles Schwab, uh, news. I can still call you the news, right? January official Rick Worster in the house. Good to see you.

It's great to see you. Thanks for having us on. And it is an exciting day, a new day, National Investing Day never existed until this

year. Yeah, and I was just briefly talking to you off camera. I was thinking back ahead of this interview.A stock was never a discussion in my household. I, I have to be honest, I didn't hear about investing or stocks, maybe until I was in 9th or 10th grade, and still,I felt completely behind. I what took so long to get a date like this on the map?

Well, I agree. 80% of people graduate high school without having taken a personal finance class. And so I think you're not alone and not having grown up talking about stocks and, and our goal with May 1st is to try to have a day where people think about having that discussion with their families and with their loved ones talking about the power of investing.Because I think when people learn about it early and, and are conscious investors, they're gonna grow their wealth over time and the more people that do that, the better. So we're, we couldn't be more thrilled to have a day to recognize investing.

If I mentioned the stock in 1993, my dad, he'd probably tell me to shut the hell up and go out and rake some leads.yeah me too, right? But it is, but it is, it's a different time. But why, why

May 1st? May 1st is a, uh, incredibly important date for us as a firm. 50 years ago on May 1st, stocks were inaccessible for most Americans. On May 1st, 50 years ago, the SEC deregulated uh commissions in our country, and on that day, 50 years ago, most brokerages took that opportunity.With deregulated commissions to raise commissions, but Chuck Schwab, our founder, thankfully took the opportunity to lower commissions, and as a result they brought millions more Americans into investing and made it accessible. And you've seen over the last 15 years Schwab, as well as the industry, do everything we can to bring down the cost of investing.To make it more accessible so that anyone can now invest if they want. You can take the money you make raking leaves and you'll have enough to buy I

think it was 5 cents back in 1993.

Maybe it's $1 today. You scrape a few bucks together, you can go, you can go invest now, which wasn't that way 50 years ago and so it's important.important to recognize that day because now any American get can get invested and own a part of a company and that's uh that's great for people saving, investing and enhancing their financial lives

before we drill down into this more levels set for us that we all know Schwab of course I think a lot of people do, but let's say you are my 15 year old self and you've never heard of Schwab, how much money do you manage and what does the company do from day to day?

We have $10 trillion of assets that we support, 45 million client accounts across our brokerage business, our retirement business, and across our bank. And what we do on a day to day basis is we champion our clients' financial goals and help them get to where they want to be in their financial life, and we do that across interacting with them digitally, supporting them in live person to person interactions. We have branches, 400 branches all across our country and.In communities we've got 4 or 5 here in Manhattan where we're sitting today. Our goal is very simple, and that's to make a difference in your financial life, help you get invested and to, uh, and to live your best financial life that you can.

So inthat Mount Rushmore of investors I've got Warren Buffett, Charlie Munger, Charles Schwab, uh, help us.Bring to life the human that is Charles Schwab. Who is this OG of investing?

I think he is the OG. That's well put. I, you know, for 50 years, Chuck has fought for the everyday investor in our country back 50 years ago on May 1st, if you had a million dollars, it would cost you about 1% of your portfolio to buy a basket of securities. awful. Well, that's awful, but if you had $100,000 it would have cost you 10%.So you, you couldn't invest unless you had millions. And for 50 years, Chuck has done everything he could to bring down the cost of investing.To make it more accessible and more understandable and what's even more exceptional about Chuck is that as much as he's done for the everyday investor, he's an exceptional person he's kind he's generous he's thoughtful uh he's just a great person and he's done so much for investing in our country and I couldn't be more excited that we have a day now, May 1st, National Investing day to recognize all of that.

What have youlearned about investing from Charles Schwab?

Number one, investing is an act of optimism.When you invest, your expectation is that in multiple years you're gonna have more money and that the company that you're investing in is gonna do well. Number 2, to try to as much as possible, ignore the noise, you know, markets said, you know, from day to day there's gonna be news things are gonna go up and down.But the more you focus on the long term, your plan, the better off you're gonna be. And number 3, to stay diversified. The more diversified you are, the more balanced your portfolio, the more you're gonna be able to withstand the uh volatility that may come in the market. So those are three of the principles that I've learned from Chuck.

It's been an amazing 50 years, uh, in the investing community of course you've had May 1st, 1975 with the initiative uh that you talked about before.Um, then you had the rise and the next generation of of brokerages, many other things like what is the net is there the next big thing in investing that people need to be prepared for over the nextdecade?

I think one of the things I'm excited about over the next decade is finding a way to bring the strength of what we do to all Americans. So we serve today 45 million client accounts and we have a personalized relationship with many of them, but not all of them.And in part that's because we have a personalized relationship with those clients that that have more wealth and are engaging with us on a on a day to day basis I think over the next decade.With the usage of AI, we'll be able to bring the personalized level of insights that we bring to clients in those personalized relationships we'll be able to add to that through AI and be able to do that in more of a digital way, and that'll allow us to serve a group of clients in a personalized and customized way and we might not have been able to in the past, but we'll be able to do in the future. So it comes back to this theme that we were founded on 50 years ago on May Day. It's about making investing more accessible so that everyone can benefit from the power of investing.

Are 24 hour 5 day a week trading one of those next big things? And is the financial system ready for something like this?

Yeah it's a, it's a really important question. I do think 24 by 5 trading is important and helpful to investors where we have observed it to be the most helpful is for our international investors, you know, our, our, we have a lot of clients that sit in Asia and.Trade US stocks and for them they have to get up in the middle of the night to buy and sell stocks. That's not a great experience and now with 24 by 5 they can do it during their daytime, but I think it's really important that as we move to 24 by 5 to ensure that we have the liquidity and that the execution on those trades is just as strong or or close to as strong as it is during market hours here in New York.

How concerned are you that that type of trading that around the clock.Brings in a mindset that you that you need to trade more, that you can't necessarily buy a share in Apple and and forget that you own and open it up 10 years fromnow.

Well, I, you know, we, we've got a range of traders, many that trade several times a day and are actively trading the market.And then we have the majority of our clients who tend to be long term oriented and so I think there's there's different types of investors and they're gonna behave differently. We, we certainly wouldn't want someone to over trade. We want someone to have a plan and stick to that plan and for some it's being an active trader, so we, we, uh, you know, we want people to trade thoughtfully.

Does it add more volatility tomarkets?

I don't, I don't think 24 by 5 adds more volatility to, to markets. I think it allows clients to trade on their time when it, when it makes sense for them and, and, uh, I, I, I think it brings a benefit to investors. I hope I

have this right, but you're a chartered technical analyst. I

am, I am little known fact, Brian, so you.

Are you, you're a charts guy.

I am a charts guy. You still

read stock charts and looking for what, the, the head and shoulderspatterns and

yeah, absolutely. Well, you know, when I told people I got my CMT, uh, my parents, they said,

you technician, yeah,

CMT, uh, they said, are you a masseuse?I said no, I love to look at stock charts, but yes, no, I, I, I'm fascinated by, by charting. I'm also a CFA, so I like to blend technical.

I was gonna ask you that

and fundamentals. I think the combination of the two is quite powerful. I think momentum, which is really the, the underlying tenet of, of technicals, I think it's a very powerful indicator and you you look at the last couple of years, you can really see it, the mag 7, I mean.When we first started hearing about the mag 7 fundamentals and those companies were getting better. The hocks are charts were going up and it, and it just continued lots of

breakouts through resistance, right? I know a little bit about.I'm

my first rodeo. I'm

impressed. Yeah, I'll

probably get you one of these CMTs.

Yeah, I should actually. So where do you lean more into? I, I mean, of course, now you're the CEO of Charles Schwab, maybe a little less time for you to talk, butAre you more of a a fundamental guy as opposed to a charting person and if you see a breakout potential on a chart, do you then check the fundamentals or you just, OK, I see that breakout potential on the chart. I, I'm all in. You

know, I'm really, I'm focused on our clients 24/7, literally, um, you know, constantly focused on our clients and how we can help them.I have not done a lot of personal trading because I set that aside, I just wanna, I wanna make sure we nail it for our clients, but I, I think in past periods when I, when I have been more actively engaged in, in investing day to day.To me it's the the combination of the power of technicals and fundamentals is where I've personally had the most success. If you can find a place where a company that has good fundamentals and where the chart is in a in a period of momentum where it's, you know, above its 200 day and moving up into the right, that's where I've personally seen.The most attractive returns

over the course of your career, not to label this because you, we have a lot of chart readers on Yahoo Finance like they come to Yahoo Finance and read these charts and now we have advanced charting and I can go on for days about this. I love the stuff that we do, but is there one or two formations that you always look for that you that that gave you a signal that, you know, that's gonna be a great stock potential. I need to go research it more.

I think the the signals are are more challenging to rely upon from my perspective and I've quantitatively tested a lot of this in in uh in in my history.To me, that the simplest thing that I would look for if I was someone listening to your show and and wanted to focus on the technicals is just look at the momentum in the stock is the stock moving up to the right? Is it above its long term moving averages? And the reason I would do that is because the technicals reflect the fundamentals of the market.If a stock is going up into the right, something good is fundamentally happening at the company. So I'd keep it simple and just and, and look at momentum. When

was the last time we talked about stock charting

guys, it's been a longtime.

We do our research here. I'll find out. All right. Hang with us out, Rick. We're gonna go out for a quick break. We'll be right back on opening bid.All right. Welcome back to Opening bid, uh, sponsored by our friends over at Vanguard, having a great chat here with Charles Schwab, CEO Rick. We are talking about some stock charting, some, uh, CFA. I mean, full disclosure, I failed my level one when I was a stock analyst, and I gave up, Rick. I don't, I know, I never give up on anything, uh, uh, and I am maniacal, uh, about things, um, and I regret doing that.

It seems to have worked out OK for you,

really well. It did. I, you know, I, and I still have the books.I, I can't get rid ofthem.

There's

stilltime, but they're still important. I actually still use them, as you can imagine this role, you still read a lot of financial statements, earnings calls. I still use them as great reference points. I mean, I think the CFA is really tough as hell but really underrated.

It's a robust program. You have to study a lot. I, I, I agree with you. It's a, it's a greatprogram.

Yeah, I just wish it was a little bit.All right, but you mentioned, um, you mentioned markets, um, we're in April was a wild time for markets. uh, first week, week after Liberation Day, stocks essentially fall off this table, bad stock formations right there fall off a cliff, but they rally back. Like, why do you think things have gotten back to in some cases where they were before liberationday?

I think you know we try to take the long term view markets will go up or go down. Our our focus is on helping clients have a plan, stick to that plan and, and, and deal with these periods of uncertainty. One of the things I love about Schwab and our mission is that we champion our clients' goals and we're there for them in periods like this. So this past month or so when there's been all these headlines, it's gone down, it's come back up.We've been there we've seen record levels of logins into our digital app we've seen a heavy call volume we've been able to support clients through this and, and it gives me great pride in being able to help our clients through what's been a headline driven market.

Why do youthink they have returned to the market? Is it valuation? Is it that fear that if they don't get in now they might miss that next big move that, you know, looking out over the next 2 or 3 years and maybe this is an opportunity.

Yeah, in, in general we have seen some net equity selling and we have seen sentiment among our clients become a little bit more bearish. So in general as a group among our 45 million clients there has been a little bit more concern now within that we have seen some of our longer term oriented uh investors, some of our more active traders get invested. The other thing we've seen is uh our young clients. It's interesting. I was just in Ann Arbor in one of our branches. I said how are clients doing?And they said they were telling me our younger investors, they, many of them haven't seen a pullback like this. And so they're the ones our youngest investors are some of the ones calling us well they never called us before. How, how young are you talking here? Yeah, 20 to 30 year olds, yeah, under, under 30, which makes up about a third of our new clients that come to us every year, a third or under the age of 30, so they're, they're young investors getting invested for the first time andBecause markets have generally been going up for many years, they haven't really seen a pullback and so it's the for some of them it's the first time they've engaged with Schwab called us and asked for our expertise and, and that, uh, for us is great to be in that position to help a younger investor think about the long term and how to navigate a market like this.

This group must have been terrified over thepast month.

Well, you know, I think it's important for people to know markets can go both ways and to be prepared for that.They've faced it. I think it's, uh, I think they're facing it generally holding up well, but the first time you go through a market, pull back, it can be

especially when you don't have a lot of, I mean, I mean, I, I don't know what a sub 30 year old is, but I think sub 30, I mean, when they're not wealthy. I mean, it's got to be very worrying to them.

It is worrying and.You, I think they've benefited from the fact that they've, they've been invested in and it's been such a robust market the last couple of years. They, they, they, they've, they've seen up and so when they get in an environment where it is a little choppier it's they wanna talk to someone and oftentimes it's the first time that they wanted to talk to someone and so what I've heard from, and I was in Ann Arbor recently I was in our Austin branch not long after that one of the things.That I've heard is we, we see these young investors coming in and wanting to talk to us and that's the benefit of Schwab. It's not just an app we we sit by your side and help you achieve your financial goal across multiple platforms and in periods like this that really shines.

I, I, I can only imagine how much data and what you get in your position, but this younger investor, what do their portfolios look like?

We see, uh, you know, primarily stocks, you know, if you're under the age of 30, stocks make a lot of sense, and I think most clients have most of their assets in there, some interest in crypto, uh, you know, at, at Schwab we're the number one custodian for crypto ETF assets. Some of that comes from our, our younger investors that would be primarily what we see.

Is it is it the mag 7 and is it just momentum stocks like stocks they may see in the news and they go out and buy them and.That's it like, I'm trying to figure out because, you know, we get a lot of data here at Yahoo Finance, and it is the community loves Mag 7, but what about the other 493 stocks? I mean, they have in many cases strong fundamentals. A lot of those companies are growing sales and earnings, their margins are pretty good.

Absolutely, and we see a lot of our investor base investing in those other 493. We certainly have clients that buy the mag 7, but we also have many that that buy the whole market or or or participate with many of the other 493 and.You know, I think one of the uh indices that's done well recently has been the the equal weighted indices, and I, and I think there's lots of ways to get invested. Our, our primary goal is to make sure clients have a plan. They know how to get invested and then we help them in their journey and it all comes back to to May 1, National Investing Day. That was about getting more and more people invested so that they can own their tomorrow and whether it's the mag 7 or a broad set of stocks, just great clients are investing in their future.

Last time we talked you were dabbling in Bitcoin. Any update on where Charles Schwab stands in the field of cryptocurrency?

Sure. First, there's lots of ways for clients to get invested in crypto at Schwab, and we provide lots of insights and education around crypto. We want to be a destination that investors choose to invest their crypto assets at. In addition to all that we do today, we are going to add spot crypto trading in the next 12 months. We're gonna focus initially on.Bitcoin and Ethereum, it'll be on our Think or swim platform, uh, then shortly after on Schwab.com and our

site, no like puppy coins. This is like the real, you know, but the real things out of the block here.

Yeah, our observation is that there's, there's different types of crypto investors. You have those that have stock and bond portfolios that want to invest in crypto because they've learned a little bit about it. They've, they've heard a lot about it and they wanna own a little bit of it, and those investors we see primarily wanna participate in Bitcoin and Ethereum.And then you have a what I would call a a group of Bitcoin aficionados and they're in all these coins that that that we're less familiar with and that the value of this is harder to discern. Those are those are areas we'll leave to the side and and let someone else make available. We're focused on those everyday investors that want crypto to be a part of their portfolio how.

Does adding crypto does add more risk to the to the balance sheet of a Charles Schwab?

These are client assets, so it's clients investing their dollars. It's, it's on their balance sheet, not ours. One of the things that has prevented us from offering crypto to date, but which has changed, is there have been regulations for bank holding companies like ourselves that when a client held crypto at our firm, we had to actually hold capital against it.Which we don't against the client equity or bond positions but we would have had to against the crypto position so that's prevented us from being in the market that's changed we'll get into crypto but no our our balance sheet, uh, that doesn't show up on our balance sheet is the client's holdings.

A lotof CEOs that I talked to in financial services coming into the year, they were very optimistic on the regulatory backdrop under the Trump administration. Have you seen any movement on regulation, uh, that would make you excited for the balance of the year, or has that just taken a backseat to tariffs and everything else going on?

I do believe the regulatory environment will be a conducive one for retail investors. For 50 years we've worked closely with regulators to try to create a market environment that the clients trusted to participate in that was the most efficient, most accessible, most liquid, least costly market in the world, and I think collectively we've done that, working closely with regulators to make that happen as we look forward, I think we'll have a regulatory regime that is focused on.The right set of things for the end investor and and that focus rather than a broad more comprehensive approach I think will be a great thing for the retail investor and I think generally it will be a good environment for firms like ourselves.

In thelast, uh, part of the podcast we always love to get a hot take from a guest that none of this is written down just off the top of my head. How hard is it to be you in this role? Can you go play golf without someone asking you, hey, what's the next hot stock tip?

You know, it's not you're a golfer. Yeah, I am a golfer. I, you know, I played golf in college. I love golf, but I love my job more and, uh.You know, it, it's what, what is so rewarding about this job is feeling like that collectively myself and my 33,000 colleagues that we can work together to make a difference for clients in their financial life. I wake up at at every every day out of bed 4 a.m. ready to go because I know on the other end there's a teacher in Indiana that's gonna benefit from something we're we're doing. There's a construction worker in Boston.That's, you know, getting up early, pounding nails and saving every dollar they can to retire and for us to have the opportunity to stand beside that person and to help them in whatever channel they choose to work with us in gives us, uh, uh, you know, great feeling of responsibility but also of inspiration to make a difference so I, I love what we do.And when you love what you do, it's not hard, it's, it's a, it's a real honor to work with my 33,000 colleagues to make a difference.

My go to line is when everybody, when someone asked me, usually family members like, where do you think the market's gonna go, uh, 2 years from now, 3 years from now? I said, look, uh, 25 years from now it will probably be higher. I mean, do you have a go to line that you just tell everyone it's just, just, OK, it's gonna do this and let me go back to playing golf.

I say come in and talk to one of our financial consultants in in a neighborhood near you and, and we'll help you get invested. You know, it's, it's hard to give stock tips, but I think we don't. I think your advice is the right advice. Get invested and stay invested and, and I think you'll grow your wealth and we've seen that.In our country in a big way and it comes back to 50 years ago. Now everyone can get invested in it and they couldn't 50 years ago on, on May Day, National Investing Day. I hope it becomes the, uh, the new Valentine's Day that everybody celebrates and.And you know, so we'll see a big day for the

firm. No, and this is, uh, right in the wheelhouse of Yahoo Finance. So I appreciate you guys coming, uh, here to talk to us about it, celebrating National Investing Day, May 1st. Charles Schwab, Rick Worster, we'll talk to you soon. You got it.

Thanks for having me, Brian.

I appreciate it. All right, that's it for the latest episode of opening bid. Hit us with all those 5 stars on the podcast platforms, the thumbs up.On YouTube, love all of your feedback, especially on something like National Investing Day, very, very important stuff. I'm also very curious on how you are investing right now and if you are investing, if you're not investing, I want to know why. Hit me up on uh YouTube or at uh or at X, I forgot my own name, uh, at Brianzazi. Talk to you soon.