When: Today, Friday, May 16th
Where: CNBC's Business Day Programming
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Charles Schwab. Excerpts of the interview will air throughout CNBC's Business Day programming today.
SCHWAB EXCERPT 1:
ANCHOR: CHARLES SCHWAB IS AN ICON AMONG MANY BABY BOOMERS. THE 70 YEAR OLD FOUNDER OF THE DISCOUNT BROKERAGE IS ALSO THE AUTHOR OF SEVERAL INVESTING BOOKS, INCLUDING "YOU'RE 50, NOW WHAT?" GEARED TO BOOMERS.
SHARON EPPERSON CAUGHT UP WITH HIM AT HIS COMPANY'S HEADQUARTERS IN SAN FRANCISCO. SHE'S HERE WITH MORE.
EPPERSON: CHARLES SCHWAB ISN'T SHY ABOUT TALKING TO THE PUBLIC. HE'S CONSTANTLY PUTTING HIMSELF OUT THERE IN THE FIRM'S "TALK TO CHUCK" MARKETING CAMPAIGN... SO WE DECIDED TO ASK HIM WHEN INVESTORS TALK TO HIM..WHAT DO THEY WANT TO KNOW?
SCHWAB: WELL THE FIRST QUESTION I'M ASKED RIGHT NOW IS WHAT SHOULD I DO WITH THIS CREDIT CRISIS? HOW SHOULD I REACT TO IT? WHAT SHOULD I DO? AND I TRY TO CALM THEM DOWN AND TELL THEM THESE THINGS HAVE HAPPENED BEFORE. NOT THE EXACT SAME THING, BUT WE'VE HAD OTHER ISSUES BEFORE.
EPPERSON: HE SAYS INVESTORS -- PARTICULARLY OLDER BOOMERS WITH RETIREMENT ONLY A FEW YEARS AWAY -- NEED TO TAKE THEIR EMOTIONS OUT OF INVESTING AND GET BACK TO BASICS.
SCHWAB: EVEN OUR FED CHAIRMANS, THE SMARTEST GUYS IN THE ROOM SO TO SPEAK, DON'T KNOW WHAT'S GOING TO HAPPEN TOMORROW. SO THE WAY TO HANDLE THE UNCERTAINTIES OF TOMORROW IS THROUGH APPROPRIATE DIVERSIFICATION AND ASSET ALLOCATION. THAT IS THE ONLY WAY TO CREATE THE CERTAINTY THAT YOU CAN SURVIVE THE UPS AND DOWNS
SHARON: HE'S VERY CONCERNED ABOUT WHAT HE CALLS THE "BUBBLE" IN OIL, GOLD AND COMMODITIES. HE SUGGESTS PUTTING ONLY 2-3 PERCENT OF YOUR INVESTMENT PORTFOLIO THERE...DIVERSIFIED EQUITIES ARE STILL THE WAY TO GO FOR THE BULK OF SAVINGS -- DON'T JUST STICK IT ALL IN CDS OR A MONEY MARKET ACCOUNT.
SCHWAB: PEOPLE WHO JUST BAIL OUT...THEY'RE GOING TO REALLY SUFFER IN 3 YEARS OR 5 YEARS TIME. THEY'RE GOING TO SEE THAT THEY'VE SAVED MONEY BUT THEIR PURCHASING POWER IS DOWN 20 PERCENT, THAT'S NOT GOOD EITHER.
SCHWAB EXCERPT 2:
ANCHOR: YOU'VE DREAMED OF RETIRING BY AGE 65 OR MAYBE EARLIER, BUT HAVE YOU SAVED ENOUGH? WORKING LONGER OR TAKING ON A NEW CAREER IS THE "NEW RETIREMENT" MANY BABY BOOMERS MUST NOW ENVISION. SHARON EPPERSON CAUGHT UP WITH AN INVESTING ICON -- CHARLES SCHWAB -- TO GET HIS TAKE ON BOOMER ANGST.
EPPERSON: AT 70, CHUCK SCHWAB IS NO LONGER A BOOMER, BUT HE TALKS TO THEM ALL THE TIME. AND HE ENCOURAGES BOOMERS TO TALK TO HIM. "TALK TO CHUCK".. THE FIRM'S MARKETING CAMPAIGN... RESONATES WITH MANY BOOMERS...HE'S A SELF-PROCLAIMED ADVOCATE FOR THE INDIVIDUAL INVESTOR.
WE ASKED CHUCK WHETHER HE'S WORRIED ABOUT BOOMERS AND THEIR RETIREMENT SAVINGS. HE'S RATHER OPTIMISTIC.
SCHWAB: THERE'S STILL EQUITY IN THEIR REAL ESTATE, THAT'S A GREAT SAVINGS DEVICE. THEIR 401K, THAT'S A GREAT SAVINGS DEVICE. MANY WHO STARTED IRAS. SO THE BABY BOOMERS FRANKLY I THINK ARE GOING TO BE OK.
EPPERSON: BUT STUDIES SHOW MANY BOOMERS ARE NOT GOING TO BE OK. THE LATEST RETIREMENT CONFIDENCE SURVEY FROM THE EMPLOYEE BENEFITS RESEARCH INSTITUTE SAYS... 40 PERCENT OF THOSE AGES 45 AND OLDER... HAVE SAVED LESS THAN $25,000 FOR RETIREMENT
IT'S NOT SURPRISING, THEN, THAT ABOUT HALF OF THOSE 45 AND OLDER HAVEN'T EVEN TRIED TO CALCULATE HOW MUCH THEY NEED TO SAVE FOR RETIREMENT. SCHWAB SAYS THIS IS THE PROBLEM...
SCHWAB: THERE'S A CERTAIN RESOLUTION IN THEIR OWN MIND THAT I THINK I CAN MAKE IT ON MY SOCIAL SECURITY. I MIGHT HAVE TO DOWNSIZE MY APPETITE FOR HOW I LIVE, BUT THERE'S CERTAIN COMPLACENCY FRANKLY BY A LOT OF PEOPLE THAT THAT'S OK, I'M HAPPY WHERE I AM IN LIFE.
EPPERSON: CHUCK SCHWAB SAYS MANY BOOMERS CLOSEST TO RETIREMENT WILL FACE A "RUDE AWAKENING" AS THEY START TO THINK ABOUT GIVING UP THEIR INCOME AND LIVING OFF SOCIAL SECURITY...
SCHWAB EXCERPT 3:
ANCHOR: THE SAGGING ECONOMY, RISING FOOD AND ENERGY PRICES AND PALTRY SAVINGS ARE THE TRIPLE THREAT THAT MAY FORCE MANY BABY BOOMERS TO PUT OFF RETIREMENT BECAUSE THEY SIMPLY CANNOT AFFORD IT.
SHARON EPPERSON RECENTLY CAUGHT UP WITH CHARLES SCHWAB, AN INVESTING ICON AND AUTHOR OF SEVERAL BOOKS ON FINANCIAL INDEPENDENCE AND INVESTING FOR BOOMERS.
SHE JOINS US NOW WITH MORE ON HIS ADVICE FOR BOOMERS.
EPPERSON: CHUCK SCHWAB SAYS INVESTORS -- PARTICULARLY OLDER BOOMERS WITH RETIREMENT ONLY A FEW YEARS AWAY -- NEED TO TAKE THEIR EMOTIONS OUT OF INVESTING AND GET BACK TO BASICS.
SCHWAB: EVEN OUR FED CHAIRMANS, THE SMARTEST GUYS IN THE ROOM SO TO SPEAK, DON'T KNOW WHAT'S GOING TO HAPPEN TOMORROW. SO THE WAY TO HANDLE THE UNCERTAINTIES OF TOMORROW IS THROUGH APPROPRIATE DIVERSIFICATION AND ASSET ALLOCATION. THAT IS THE ONLY WAY TO CREATE THE CERTAINTY THAT YOU CAN SURVIVE THE UPS AND DOWNS
EPPERSON: YET IN THE MIDST OF THIS ECONOMIC DOWNTURN, A SURVEY RELEASED THIS WEEK FROM AARP SHOWS BOOMERS ARE PUTTING LESS MONEY IN SAVINGS, TAKING MONEY OUT OF 401(K)S AND OTHER INVESTMENTS, AND CHANGING THEIR RISK PROFILES.
EPPERSON: CHUCK SCHWAB ADVISES AGAINST LETTING EMOTIONS GUIDE YOUR INVESTING. AND DON'T JUST LOOK FOR A "MAGICAL" INVESTMENT THAT WILL MAKE UP FOR LOST TIME. LOADING UP ON OIL, GOLD AND COMMODITIES IS NOT THE ANSWER.
SCHWAB: YOU CAN SEE A MASSIVE BUBBLE BEING CREATED RIGHT NOW JUST AS THE PUBLIC THINKS ' THIS IS TERRIFIC, I SHOULD BUY MY GOLD AT $1000 AND OUNCE BECAUSE THEY THINK IT SHOULD GO TO 2,' I THINK IT'S A LITTLE NAIVE. THEY'RE AT THE PEAK OF A CYCLE THAT'S GONE ON FOR SEVERAL YEARS NOW, SO IT'S SIMPLY THE WRONG TIME TO JUMP IN
SHARON: DON'T BAIL OUT OF EQUITIES EITHER, JUST BECAUSE STOCKS HAVEN'T DONE SO WELL THIS YEAR. AND DUMPING YOUR SAVINGS IN CASH WON'T HELP YOU FIGHT INFLATION. BOTTOM LINE - YOU HAVE TO DIVERSIFY.
SCHWAB: A DIVERSIFIED PORTFOLIO OF EQUITIES HAS BEEN A GREAT DEFENSE OVER THE PAST 100 YEARS, IT GOES UP AND DOWN...
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