Investor activity makes a leap with increased equity market exposure
August 07, 2014 – OMAHA, Neb.–(BUSINESS WIRE)–TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD), is today releasing the Investor Movement Index® reading for July 2014. The Investor Movement Index, or the IMXsm, is a proprietary, behavior-based index created by TD Ameritrade that aggregates Main Street investor positions and activity to measure what investors are actually doing and how they are positioned in the markets.
The July 2014 Investor Movement Index for the four weeks ending July 25, 2014, reveals:
- Reading: 5.85 (compared to 5.67 in June)
- Trend direction: Positive
- Trend length: 1 month
- Score relative to historic ranges: High
The IMX remained relatively flat from April 2014 through June 2014, but then jumped higher in July and came in at 5.85, which was near the March 2014 high of 5.87. TD Ameritrade clients increased their equity market exposure in July as new all-time highs were hit by major indexes including the S&P 500, Nasdaq Composite, Dow Jones Industrials, and the Russell 2000. Volatility remained low in the large cap indexes, as they seemed range-bound amid geopolitical tensions related to Ukraine and the Middle East. However, the Russell 2000 small cap index had declined 6 percent as of July 25 from the July 3 high.
“We saw individual investors increase their exposure to the equity market in time with the major indexes at record highs,” said JJ Kinahan, chief strategist, TD Ameritrade. “Our clients have been engaged and logging into their accounts ready to react to the latest earnings announcements and market events.”
Net buying activity was spread across several sectors in July, and clients were net buyers overall. GoPro (GPRO), which held its IPO at the end of June, was a popular buy as clients began to build positions in it. Gilead Sciences Inc. (GILD) dipped in July, but then continued its trend higher as clients bought shares of the biotech firm. Clients were also net buyers of Yahoo Inc. (YHOO), which has been range bound for the last few months. Another popular buy was Whole Foods Market (WFM); the stock continued to trade lower in July and some clients treated the decline as a buying opportunity, adding shares to their portfolios.
Technology & Financial saw brisk selling
Although clients were net buyers overall, both the technology and financial sectors were net sold, and selling activity was similar to last month. Within the technology sector many clients were net sellers of Intel Corp (INTC), Facebook (FB), CISCO Systems (CSCO), and Microsoft Corp. (MSFT). Selling activity in the financial sector included Bank of America (BAC) and Citigroup (C). However, each of these technology and financial sector stocks continue to be widely held by TD Ameritrade clients.
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of 6 million funded accounts that includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.
For more information on the Investor Movement Index, including historical IMX data going back to December 2010, to view the full report from July 2014, or to sign up for future IMX news alerts, please visit www.tdameritrade.com/IMX. Additionally, TD Ameritrade clients can chart the IMX using the symbol $IMX in either the thinkorswim or TD Ameritrade Mobile Trader platforms.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
The IMX is not a tradable index. The IMX should not be used as an indicator or predictor of future client trading volume or financial performance for TD Ameritrade.
For the latest TD Ameritrade news and information, follow the Company on Twitter, @TDAmeritradePR.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE:AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how — bringing Wall Street to Main Street for more than 39 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information.