Investors remained net buyers overall, but
adjusted equity exposure to account for market volatility
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 October
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 October 2014 Investor Movement Index for the four weeks
ending October 31, 2014, reveals:
- Reading: 5.22 (compared to 5.79 in
September)
- Trend direction: Negative
- Trend length: 1 month
- Score relative to historic ranges:
Moderately High
“Volatility returned to equity markets last month and investors
quickly adjusted their portfolios,” said Nicole Sherrod, managing
director for TD Ameritrade. “Many of our clients ramp up equity
exposure during periods of low volatility, and dial back without
panicking during short-term volatility.”
The IMX was sharply lower last month as volatility ruled the
market during the October IMX period. Though still bullish, the 11
percent decline was the second largest drop since inception, with
the IMX falling back to levels not seen since October 2013. The
decline was not driven by net selling; in fact, TD Ameritrade
clients were net buyers overall. Equity market exposure measured by
the IMX declined in October because client portfolios were less
volatile relative to the S&P 500 than in previous periods,
driving the IMX down.
The major equity indexes declined through the first two weeks of
the month amid global economic concerns, with the Russell 2000,
S&P 500, Dow Jones Industrial Average, and Nasdaq Composite
hitting lows that briefly wiped out 2014 gains. Treasury prices
rose and the 10-Year Treasury yield dipped below two percent. The
market decline was short-lived, and earnings season ramped up with
generally positive results. Domestic economic reports were also
largely favorable, and the equity indices bounced back to record
levels to close out the month.
Despite the sharp recovery of the equity markets, there are
still plenty of factors for investors to weigh in November: Japan
announced strong stimulus plans while the U.S. Federal Reserve
ended its quantitative easing program of asset purchases; commodity
prices continued to fall, putting pressure on energy related
stocks; and mid-term elections in the U.S. shifted the balance of
Congressional power. Additional points of concern might include
Ebola, tensions related to Russia or North Korea, and ISIS threats.
As usual, there is no shortage of potential market flashpoints.
Price pressure and dividend yield were common among the
securities that were net buys in the month of October.
Dividend-paying oil producers, which have seen declines in their
prices since July, were net buys – including Transocean (RIG), BP
Plc (BP), and SeaDrill (SDRL). AT&T (T) and Ford (F) were also
dividend payers that saw price dips in the middle of the month and
were net buys. That said, net buying was not restricted to stocks
under pressure. Apple (AAPL) and Alibaba (BABA) were popular buys
and had positive returns for the October IMX period. Kinder Morgan
(KMI), Tesla (TSLA), and Advanced Micro Devices (AMD) were also
bought.
Citigroup (C), which has been under investigation for
questionable activities in its FOREX trading business, was net
sold. Sirius XM (SIRI) and Coca Cola (KO) both saw volatility
around their earnings announcements, and were net sold.
Manufacturers in the technology industry, like Corning (GLW), Cisco
(CSCO), and Oracle (ORCL), were also popular net sells, as were
Intel (INTC) and Yahoo (YHOO).
For more information on the Investor Movement Index, including
historical IMX data going back to December 2010, to view the full
report from October 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.
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.
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, as well as an official sponsor of the National Football
League for the 2014, 2015 and 2016 seasons, 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.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org)/SIPC (www.SIPC.org) Source: TD Ameritrade
Holding Corporation
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20141110005204/en/
TD Ameritrade, Inc.For Media:Alyson Nikulicz,
201-369-8388Communications & Public
Affairsalyson.nikulicz@ersservices.netorFor Investors:Jeff Goeser,
402-597-8464Investor Relations &
Financejeffrey.goeser@tdameritrade.com@TDAmeritradePR
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