TD Ameritrade’s Investor Movement Index: Clients Were Net Buyers of Equities in November

TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD), is today releasing the Investor Movement Index® reading for November 2015. The Investor Movement Index, or the IMXSM, is a proprietary, behavior-based index created by TD Ameritrade that aggregates Main Street investor positions and activity to measure what investors are actually doing and how they are positioned in the markets.

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The November 2015 Investor Movement Index for the four weeks ending November 27, 2015, reveals:

• Reading: 4.88 (compared to 4.79 in October)
• Trend direction: Positive
• Trend length: 2 months
• Score relative to historic ranges: Middle

The IMX moved higher for a second month, to 4.88, as TD Ameritrade clients were net buyers.

TD Ameritrade clients were more aggressively positioned in November. The increase in exposure to equity markets was the result of both net buying and increases in the volatility relative to the overall market in some of the most widely held positions. The increase brings the IMX to just slightly above the level where it began the year.

All four major equity indices ended the November IMX period higher than where they began, but only after each had a brief dip into negative territory during the middle of the month. The S&P 500 and Dow Jones Industrial Average saw gains of less than 1%, but the NASDAQ Composite rebounded to close the period up 1.5%. Each has largely regained the losses sustained in the volatility of late August and returned to near all-time highs. The Russell 2000 saw the largest gain and was up 3.5% for the month. The mid-month market decline seemed to be initiated by U.S. economic reports which noted a higher than anticipated number of jobs being created in October and that the unemployment rate fell to a seven year low. The unemployment rate has been noted as one of the metrics in the Federal Reserve’s decision regarding whether or not to raise its key interest rate. Volatility in the S&P 500 as measured by the VIX spiked briefly during the market’s down trend, but returned to lower levels by the end of the month. The spike in volatility coincided with news of a widely publicized terrorist attack in Paris.

“November had a couple days of heavy selling that resulted in spikes in volatility. We saw our clients take these as aggressive buying opportunities,” said JJ Kinahan, chief market strategist, TD Ameritrade. “Retailers, specifically well-known retailers like Amazon and Nike, were a popular group to gain exposure in ahead of the holiday season. We also saw the continued trend of dividend-paying stocks garnering interest as even with an expected rate raise investors see value in these stocks.”

Retailers and consumer goods issuers continued to be popular net buys ahead of the holiday shopping season. Online retailer Amazon.com Inc. (AMZN) appeared to garner the most interest in this group, however NIKE Inc. (NKE) and Starbucks Corp. (SBUX) were also popular net buys. Net buying in dividend-paying companies also persisted into November. AT&T Inc. (T), with a dividend yield of greater than 5%, and International Business Machines Corp. (IBM), which yields more than 3%, were both net buys from the technology sector. Dividend payers Alcoa Inc. (AA) and Freeport-McMoRan Inc. (FCX), both from the basic materials sector, were net buys as well.

Despite being overall net buyers of equities, TD Ameritrade clients did find some positions to sell in November. Financial issuers Bank of America Corp. (BAC) and Citigroup Inc. (C), which have both rallied since the beginning of October, were both net sells. Dow Chemical (DOW) also rallied through November and was net sold. Microsoft Inc. (MSFT), which has traded near its all-time high since last month following a favorable earnings report, was net sold as well. And Rite Aid Corp. (RAD), which had been a popular net buy in recent months, was net sold following a buyout announcement by rival Walgreens Boots Alliance Inc. (WBA).

The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of 6 million funded accounts that 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 December 2010, to view the full report from November 2015, 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 TD Ameritrade Mobile Trader platforms.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

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.

For the latest TD Ameritrade news and information, follow the Company on Twitter, @TDAmeritradePR.

Source: TD Ameritrade Holding Corporation

About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE:AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how — bringing Wall Street to Main Street for more than 40 years. An official sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams, TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information.

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