Markets were mixed during a period of unprecedented retail investor activity
OMAHA, Neb.–(BUSINESS WIRE)–The Investor Movement Index® (IMXSM) increased to 6.91 in January, up 10.38 percent from its December score of 6.26. 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 January 29, 2021 ranks “Moderate High” compared to historic averages.
“In a month with so many major news stories, from government stimulus, to a change of power in D.C., to the start of earnings season and finishing with some unparalleled volatility in stocks such as GameStop (GME) and AMC Theatres (AMC), January marks the first time in almost a year where COVID was not the primary day to day story,” said JJ Kinahan, chief market strategist at TD Ameritrade. “The timing of the GME frenzy at the tail end of January was such that ultimately, the overall story of retail trading during the period–the story captured by this IMX report–is in fact one that’s much more closely married to typical market dynamics than recent weeks’ headlines might convey. As champions of the retail investor for 45 years and counting, we at TD Ameritrade are happy to see a swell in market engagement not only in recent weeks but over the last year. We encourage all clients, but particularly new clients, to take advantage of our education along with our entire ecosystem of cutting-edge platforms and exceptional service.”
TD Ameritrade clients engaged in heavy trading among both GME and AMC primarily in the last week of the period, but remained relatively neutral on both stocks, with GME ending the period as slightly net bought. AMC was lightly purchased throughout the period, including early in January prior to the volatility ensuing. While the “short-squeeze” story dominated headlines late in the period, overall, equity markets were mixed during the January period. The S&P 500 and Nasdaq Composite both increased, while the Dow Jones Industrial Average decreased, and all three indices reached all-time highs during the period before selling off in the final days and posting the largest daily decreases since October 2020. Equity markets headed lower on concerns over the COVID-19 vaccine rollout, with many investors questioning whether the slower-than-anticipated pace would impact the economic recovery as new variants of the virus appear around the globe. The Federal Reserve announced it would maintain its current economic policies and noted economic softness in recent weeks.
In the January period, TD Ameritrade clients were once again net buyers overall and net buyers of equities. Some of the popular names bought during the period were:
- Apple Inc. (AAPL)
- AT&T Inc. (T)
- Advanced Micro Devices Inc. (AMD)
- Fubotv Inc. (FUBO)
- Plug Power Inc. (PLUG)
Although clients were net buyers of equities, they found some names to sell during the period, including:
- Moderna Inc. (MRNA)
- Pfizer Inc. (PFE)
- Intel Corp. (INTC)
- Best Buy Inc. (BBY)
- Teladoc Health Inc. (TDOC)
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 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 January 2021; 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
TD Ameritrade provides investing services and education to self-directed investors and registered investment advisors. A leader in U.S. retail trading, we leverage the latest in cutting edge technologies and one-on-one client care to help our clients stay on top of market trends. Learn more by visiting www.amtd.com.
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Source: TD Ameritrade, Inc.
Sr. Manager, Corporate Communications