Off 42% From Highs, What's Wrong With Charles Schwab Stock?
You don't make money buying good stocks when everyone is heaping praise on them. You make money buying when there is "blood in the streets" and investors are worried about the future. Well, that moment may have happened for Charles Schwab (NYSE: SCHW). The leading online stock brokerage has been a 100-bagger for long-term investors -- crushing the broad market returns since going public -- but has found itself off 42% from all-time highs in 2023.
Investors are worried about how rising interest rates and held-to-maturity (HTM) mortgage securities will affect Schwab's earnings power in the years to come. That's presenting a major headwind for Schwab's business right now. The company clearly made some mistakes when interest rates were at zero and was not prepared for the Federal Reserve to start hiking the Federal Funds Rate.
Short-term pain could continue for Schwab, but does this discounted price present a buying opportunity for investors focused on the long term? Let's take a look.
Source Fool.com
