TD Ameritrade Investor Movement Index: IMX Dips in February Amid Market Volatility
TD Ameritrade clients were net sellers overall for first time since June 2019
OMAHA, Neb.–(BUSINESS WIRE)–The Investor Movement Index® (IMXSM) decreased to 5.16 in February, down 9.15 percent from its January score of 5.68. 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 four-week period ending February 28, 2020, ranks “Moderate Low” compared to historic averages.
“Turbulence in the markets, particularly toward the end of the month, led retail investors to reduce their exposure in February, selling equities and buying historically less risky assets, including fixed income,” said JJ Kinahan, chief market strategist at TD Ameritrade. “We’ll be keeping a close eye on the market volatility that lies ahead as the global health impact of coronavirus becomes more clear and the Federal Reserve’s rate cut plays out.”
The February IMX period saw heightened volatility for equity markets. As concerns rose that the COVID-19 outbreak could become a global pandemic, the markets saw their worst weekly performance since the 2008 financial crisis, with the S&P 500 down 11.49 percent, the Nasdaq down 10.54 percent, and the Dow Jones Industrial Average down 12.36 percent in the final week of trading. This selloff put the S&P 500 down 8.41 percent for the month, with the worst performance coming from the Dow Jones finishing down 10.07 percent, and the Nasdaq outperforming both but still finishing down 6.38 percent. The Cboe Volatility Index, or VIX, which measures the volatility of the S&P 500 Index, jumped to 40.11, securing its highest close since the turmoil that followed the devaluation of the Chinese yuan in August 2015.
Retail investors at TD Ameritrade were net sellers of equities during the February period. However, clients did use the pullback as a buying opportunity for popular names and disruptive companies, including:
- Microsoft Inc. (MSFT)
- Apple Inc. (AAPL)
- The Walt Disney Company (DIS)
- Gilead Sciences Inc. (GILD)
As markets climbed in the first weeks of February, retail investors saw an opportunity to take profits in some names that were at or near highs to start the month, selling popular names such as:
- Amazon Inc. (AMZN)
- Netflix Inc. (NFLX)
- Twitter Inc. (TWTR)
- Square Inc. (SQ)
Millennial Buys & Sells
In February, there were some differences between millennial trading activity and the general population. Millennials net bought Penn National Gaming (PENN), Advanced Micro Devices (AMD) and Visa (V).
On the sell side, millennials differed from the total client population with Iqiyi (IQ) and Activision Blizzard (ATVI).
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 February 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.
Source: TD Ameritrade Holding Corporation
Sr. Manager, Corporate Communications
Managing Director, Investor Relations