Charles Schwab Thinks Markets Should 'Pause'

It’s rare to see a brokerage head being anything other than bullish on the market. Perhaps that’s the reason why Charles R. Schwab, founder and Chairman of Charles Schwab Corp SCHW, has been so successful, voicing his opinions honestly.

Schwab was at a PGA Tour event to celebrate PGA Tour's 20-year partnership with Charles Schwab, where he was interviewed by CNBC along with PGA Tour Commissioner, Tim Finchem.

What Is Your Outlook For The US Equity Markets?

“Well, I think, it’s a time to pause,” Schwab said. “We had three and a half, four years of nothing, but straight up markets. So, it seems appropriate to me that we have valuations sort of get settled in and before we have the opportunity for another significant rise. Hopefully that will come with an improving economy as it seems to be improving today.”

Have Index Funds Proven To Consistently Outperform Their Actively Managed Counterparts?

“Oh they have and they have over really and over a long period of time and there are reasons why. There are lot of costs of course, broader diversification and also the tax savings that you have from less turnover in the portfolio,” Schwab replied.

Will 2015 Be The Year Of Actively Managed Funds?

“My own view is that you should have a, a core part of your portfolio should be in index funds no matter what and then I have a portion in active managed, mostly my favourite position is really in the low priced stocks for active management,” Schwab said.