US: TD Ameritrade IMX


Mon Dec 07 11:30:00 CST 2015

Actual Previous
Level 4.88 4.79

Highlights
Net buying by TD Ameritrade clients together with higher volatility in widely held positions boosted the discount broker's investor movement index to a still moderate 4.88 in November from 4.79 in October. The report notes that its clients were aggressive buyers during a couple of heavy selling days in the month including the Monday following the terrorist attack on Paris. The report also notes buying of retailers ahead of the holidays and continued buying of dividend-paying stocks. Clients also took profits following recent gains in Bank of America, Citigroup, Dow Chemical and Microsoft.

Definition
The Investor Movement Index, (or the IMX) is a proprietary, behavior-based index created by TD Ameritrade designed to provide insight into Main Street sentiment. It measures what investors are actually doing, and how they are actually positioned in the markets. The IMX does this by using data representing the holdings/positions, trading activity and other data from an anonymous sample from six million funded accounts. These data are used to create a snapshot that can be monitored over time, or compared to other market indicators, to suggest the current sentiment of the real portfolios held by retail investors.

Description
Wall Street often looks to TD Ameritrade, one of the largest online brokerage firms for insight into the mood, sentiment, and behavior of retail investors. Up to now, Wall Street has largely relied on opinion surveys - which measure what investors are thinking or what they're saying - to provide this information. With six million funded client accounts spanning investors of all ages, account sizes, and experience levels, TD Ameritrade is in a unique position to offer a quantitative, behavior‐based index that can better reflect what investors are actually doing.

Importance
The IMX can provide insight into whether investors are growing more bullish or bearish on equities.

Interpretation
The IMX measures the level of exposure of Retail Investor Portfolios to the U.S. equity market. The IMX has not been indexed to a specific year or normalized. Scores should be viewed in the context of historic ranges and recent trends. When reviewing month over month results and trends over time it's most important to put IMX values into context by considering historical ranges. For example, the historical range can be put into 5 quintiles - High, Moderately High, Neutral, Moderately Low and Low. The higher the score is the more bullish the level. Other important considerations include recent trends up/down and the duration of trends.