Investor Movement Index (IMX) for September 2016
Major US stock indices approached or achieved all-time peaks last month and retail traders did not hide out, raising their stock exposure to 2-year highs in September.
For the 2nd-straight month and the 5th month in the last 6, retail traders tracked by TD Ameritrade were net buyers of stocks, according to the Investor Movement Index®, or the IMXSM. The IMX climbed to 5.49, up from 5.26 the prior month, and is now up approximately 25% from the 52-week low recorded earlier this year.
The last time the index was above current marks was 2 years ago, in September 2014. It then fell to as low as 4.33 last March before beginning its current march North.
September’s 4.37% rise in the index from August was a bit more subdued than the previous month’s 12% rise. But looking at the data, there’s little doubt that retail investors have had more appetite lately for stocks, especially those that are a little beaten down or offer attractive yield.
And market volatility remained low in September, despite a brief spike in the middle of the month prior to the Fed meeting, which kept relative volatility of widely held positions elevated. This activity, in concert with the net buying, resulted in an uptick in the exposure in TD Ameritrade client accounts.
The booming technology sector was out of favor with retail investors last month. Not a chance. Dividend stocks, tech stocks, and healthcare stocks all appear on the list of names most widely sought by retail traders in September.
To learn more about IMX, watch the video below.
Remember, this index is a tool that lets you see what hundreds of thousands of actual traders were doing in September across all markets.e
Retail traders now have the biggest exposure to the stock market in 2 years, but with the US Election, Q-3 earnings, and the possibility of a late-year Fed rate hike
Stay tuned to see if this Optimism continues in November, so far it has not.
By Nicole Sherrod
Paul Ebeling, Editor