TD Ameritrade clients were net buyers overall
during historic market volatility
The Investor Movement Index® (IMXSM) decreased to 4.16 in March,
down 19.38 percent from its February score of 5.16. 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.
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TD Ameritrade March 2020 Investor
Movement Index (Graphic: TD Ameritrade)
The reading for the four-week period ending March 31, 2020,
ranks “Low” compared to historic averages.
“Not since the financial crisis of 2008 have we seen this kind
of volatility in the markets,” said JJ Kinahan, chief market
strategist at TD Ameritrade. “This provided our clients with an
opportunity to revisit their portfolios in a new world of temporary
uncertainty, and they were attracted to companies with strong
balance sheets that have previously weathered storms. Looking
ahead, there’s a lot we don’t know, from the continued impact of
the COVID-19 pandemic to the potential lift provided by the
recently passed economic stimulus package.”
The March IMX period saw market volatility increase to historic
levels. Markets officially entered bear market territory, or 20
percent below previous highs. The S&P 500 decreased 13.97
percent during the period, with the Dow Jones Industrial Average
down 14.85 percent, and the Nasdaq Composite moving lower by 16.19
percent. Volatility was rampant for the entire period, with the
S&P 500 having only one day with a move less than plus or minus
one percent, and the Dow Jones registering 12 days with a move
greater than plus or minus 1,000 points. The Dow posted its worst
day since October 1987, ending the 11-year bull market. The Federal
Reserve reacted, decreasing the federal funds rate twice and
announcing accelerating Treasury bond purchases in an attempt to
increase economic activity. During the last week of the period,
markets rebounded as Congress and the Trump Administration passed a
$2 trillion stimulus package aimed at helping business and
consumers alike, giving the Dow its best week since 1938.
TD Ameritrade clients were net buyers overall during the March
IMX period, after net selling last month. Equities were net bought,
in addition to fixed income products as market volatility increased
and the Cboe Volatility Index (VIX), which measures volatility of
the S&P 500 Index, increased above 80 for the first time since
November 2008. Retail investors used a shorter time frame to trade
in the first part of the month, as turnover was faster than normal
and volatility was quickly changing, followed by heavier net buying
later in month. Some of the popular names bought by clients during
the period included:
- The Walt Disney Company (DIS)
- Ford Motor Company (F)
- Boeing Inc. (BA)
- Exxon Mobile Corp. (XOM)
Despite being net buyers during the period, TD Ameritrade retail
clients did find some names to sell, such as:
- Activision Blizzard Inc. (ATVI)
- Paypal Holdings Inc. (PYPL)
- Tencent Holdings Inc. (TCEHY)
- Fitbit Inc. (FIT)
Millennial Buys & Sells
For the first time since TD Ameritrade began tracking the
Millennial IMX, its score dipped lower than the general IMX,
decreasing by 1.24, or 23.4 percent, to 4.09 in March. Millennials
held steady throughout the month, buying systematically as markets
sold off. During this period, unique millennial buys included Royal
Caribbean (RCL) and Uber (UBER).
In March, millennials did less selling than the general
population, but the top names sold largely matched with those
selected the total client base, including Tencent Holdings Inc.
(TCEHY) and Fitbit Inc. (FIT).
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 12 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 March 2020; 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 thinkorswim Mobile 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.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to
approximately 12 million client accounts totaling approximately
$1.4 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 1 million 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.
Brokerage services provided by TD Ameritrade, Inc., member FINRA
(www.FINRA.org) / SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200406005505/en/
At the Company Margaret Farrell Sr.
Manager, Corporate Communications (203) 434-2240
margaret.farrell@tdameritrade.com Jeff Goeser Managing Director,
Investor Relations (402) 597-8464
jeffrey.goeser@tdameritrade.com
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