Retail investors toe-dip into equities and bought fixed income during August’s spikes in volatilityTD Ameritrade Investor Movement Index, a behavior-based protocol, measures the mood and positions of investors
September 09, 2019 — OMAHA, Neb.–(BUSINESS WIRE)–The Investor Movement Index® (IMXSM) measured at 4.62 in August, inching up slightly from its July score. The IMX is TD Ameritrade’s proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.
Continuing a 10-month trend of below-average IMX scores, the reading for the five-week period ending August 30, 2019, was relatively unchanged from the previous month, ranking “Moderately Low” compared to historic averages. “After two consecutive months of being net sellers of equities, clients began moving back in to cautiously buying equities and continued to use fixed income,” said JJ Kinahan, chief market strategist at TD Ameritrade. “Fed Chairman Jerome Powell’s comments on interest rates at the end of July helped kick off a volatile month for stocks, with some investors seeking potentially less-risky assets.”
Geopolitical headline news contributed to the spikes in volatility of the S&P 500 during August, with the Cboe Volatility Index (VIX) reaching the mid-20s for the first time since January. The S&P 500 moved lower by 3.3 percent while the Dow Jones Industrial Average was down 2.9 percent. The technology sector was particularly volatile, with the Nasdaq Composite lower by 4.4 percent. The yield curve on the two- and 10-year Treasurys inverted for the first time since 2007, and the yield on the 30-year reached its lowest level ever. The U.S.-China trade war continued to escalate, while the U.S. consumer confidence number fell to 2016 lows, posting its biggest monthly drop since 2012. At the same time, consumer prices rose and manufacturing activity, as measured by the Chicago PMI, rebounded back to expansionary territory.
Retail investors at TD Ameritrade used the volatility of the August IMX period to buy popular names, including:
- Walt Disney Company (DIS)
- Amazon Inc. (AMZN)
- Microsoft Corporation (MSFT)
- Beyond Meat, Inc. (BYND)
- Uber Technologies, Inc. (UBER)
TD Ameritrade clients also sold popular names during the period, including:
- Apple Inc. (AAPL)
- Micron Technology, Inc. (MU)
- QUALCOMM, Inc. (QCOM)
- Corteva, Inc. (CTVA)
- AT&T Inc. (T)
Millennial Buys & Sells
During the August IMX period, millennials with TD Ameritrade accounts bought names that the overall population did not, including Aurora Cannabis Inc. (ACB) and Canopy Growth Corporation (CGC). Like the larger client population, millennials bought Walt Disney Company (DIS), Amazon Inc. (AMZN); Microsoft Corporation (MSFT) and Uber Technologies, Inc. (UBER).
Millennials were net sellers of most of the same companies as the general population, including Apple Inc. (AAPL), Micron Technology, Inc. (MU), and Corteva, Inc. (CTVA). Unlike the total population, they were also net sellers of Facebook, Inc. (FB), Alphabet Inc. (GOOG) and Twitter, Inc. (TWTR).
About the IMX
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of more than 11 million funded accounts, which 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 January 2010; to view the full report from August 2019; 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. All investments involve risk including the possible loss of principal. Please consider all risks and objectives before investing.
Past performance of a security, strategy, or index is no guarantee of future results or investment success. Historical data should not be used alone when making investment decisions. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision.
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.
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