Highest Level in Six Months as market indices climbed to all-time highsA behavior-based index that aggregates Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets
September 10, 2018 — OMAHA, Neb.–(BUSINESS WIRE)– As the market reported strong gains in August, the Investor Movement Index® increased to its highest level since February, reaching 5.82, TD Ameritrade, Inc.1 announced today.
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 actually were doing and how they were positioned in the markets.
The August 2018 Investor Movement Index for the four weeks ended August 31, 2018 reveals:
– Reading: 5.82 (compared to 5.45 in July)
– Trend direction: positive
– Trend length: 4 months
– Score relative to historic ranges: Middle
Despite ongoing geopolitical tensions and trade fears, TD Ameritrade clients appeared optimistic in August by showing an appetite for greater risk and dialing up their exposure to equity markets. Retail investors’ confidence in the market was also reflected in the Cboe Volatility Index (VIX), which did not rise above 15 during the month. The rise in the August IMX was also impacted by millennial investors, whose exposure was greater as a result of buying equities with higher relative volatility such as Square, Inc. (SQ).
“Clients continued to slowly increase exposure to the market particularly in technology names such as Facebook, Amazon and Advanced Micro Devices,” said JJ Kinahan, chief market strategist at TD Ameritrade. “Interestingly, clients were also still interested in yield as evidence by Ford and AT&T, as the 10-year yield flounders between 2.8 and 3 percent.”
TD Ameritrade clients were net buyers of popular stocks in the August IMX period. Top buys include:
Facebook Inc. (FB), after the stock declined following a poor earnings report and posting the largest market cap decrease in the history of the stock market.
- Amazon.com Inc. (AMZN), which reached $2,000 for the first time ever and received multiple analyst upgrades.
- AT&T Inc. (T), which announced multiple investments across the U.S. to increase wireless and wired networks.
- Ford Motor Company (F), after canceling plans to import cars from China following tariff concerns.
- Advanced Micro Devices Inc. (AMD), which reached a 12-year high and more than doubled over the past four months.
Despite being net buyers, TD Ameritrade clients took profits in popular names, including:
- Qualcomm Inc. (QCOM) and Cisco Systems Inc. (CSCO), after reaching 52-week highs.
- Pfizer Inc. (PFE), which beat earnings and reached a multi-year high.
- Tesla Inc. (TSLA), which made headlines after company CEO Elon Musk commented that he was contemplating taking the company private.
- Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC), after both stocks trended higher over the past few months on the back of interest rate increases.
August was marked by strong market performance as all three major market indices posted positive gains during the period. The Nasdaq Composite was at the top with gains of 4.8 percent, followed the Dow Jones Industrial Average and S&P 500, which were up in excess of 2 percent. The S&P 500 recorded the longest bull market on record in August – 3,450 days – surpassing the previous record from late 1990 to early 2000. With the economy gaining strength, retail investors look forward to September and the potential for another rate increase during the September Fed meeting.
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 2018; 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.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more than 11 million client accounts totaling more than $1.2 trillion in assets, and custodial services to more than 6,000 registered investment advisors. We are a leader in U.S. retail trading, executing an average of more than 780,000 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 nearly 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.
1TD Ameritrade, Inc. is a broker-dealer subsidiary of TD Ameritrade Holding Corporation. Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org).