Retail investors responded to increased volatility in May by taking on more riskTD Ameritrade Investor Movement Index, a behavior-based measurement, identifies trends in investor attitudes.
June 10, 2019 — OMAHA, Neb.–(BUSINESS WIRE)–The Investor Movement Index® (IMXSM) reached 4.93 in May, up 7 percent from its April score of 4.61. 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.
The reading for the five-week period ending May 31, 2019 ranks as the highest IMX score in six months as a result of clients increasing their exposure to equities. Still, this IMX score ranks “Moderately Low” relative to historic ranges.
“Investor anxiety in May led to a market sell-off, but many investors used that volatility and the lower prices to their advantage, adding some stocks to their portfolios at attractive prices,” said JJ Kinahan, chief market strategist at TD Ameritrade. “In the coming weeks, we’ll be keeping a close eye on the Fed decision as investors hope for a long-anticipated rate cut.”
Uncertainty over global trade, economic growth
During the May IMX period, the S&P 500 decreased 6.4 percent while the Dow Jones Industrial Average declined 6.5 percent. Pressure in the technology sector caused the Nasdaq Composite to fall 8.5 percent. Uncertainty over global trade and economic growth were in play, as trade talks with China collapsed. The 10-year Treasury yield decreased more than 35 basis points during the period, ending at 2.14 percent, its lowest point since September 2017.
Retail investors at TD Ameritrade found popular names to buy during the May IMX period, including several new entrants to the public market:
- Uber Technologies Inc. (UBER)
- Beyond Meat Inc. (BYND)
- Pinterest Inc. (PINS)
- Canopy Growth Corp. (CGC)
- Tesla Inc. (TSLA)
TD Ameritrade clients also found popular names to sell during the period:
- Facebook Inc. (FB)
- Netflix Inc. (NFLX)
- Roku Inc. (ROKU)
- Wabtec Corp. (WAB)
- General Electric Co. (GE)
Millennial Buys & Sells
There were some differences in net buys between millennials and the total investor population. Millennials were net buyers of Aurora Cannabis (ACB), while the total population bought Canopy Growth (CGC). Uber (UBER) was popular among all populations, but millennials also favored Lyft (LYFT).
Millennials were net sellers of some of the same tech companies as the general population, including Facebook (FB) and Netflix (NFLX). Unlike the total population, they were also net sellers of Twitter (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 May 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.
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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About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more than 11 million client accounts totaling approximately $1.3 trillion in assets, and custodial services to more than 7,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of approximately 850,000 trades per day for our clients, more than a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh Accounts.
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Source: TD Ameritrade Holding Corporation