TD Ameritrade, the discount brokerage, said Tuesday that its Investor Movement Index (IMX) set a new all-time high of 8.53 in November 2017, up 15% and blowing past the previous reading of 7.40 set in October. The Omaha, Nebraska-based online investing company's IMX is a behavioral-based index that measures investors' actions in the market from one month to the next.
In a press release, TD Ameritrade Holding Corporation (AMTD) said that the IMX had its largest single-month gain in November, increasing more than 15%, with customers net buyers for the tenth month in a row. Net buying – coupled with more volatility in popular stocks including Apple Inc. (AAPL) and General Electric Company (GE) – helped push the index up more than 15%, TD Ameritrade said. "This IMX reading shows that investors had continued confidence in the market. They wanted exposure to the amazing rally in November as all three major indices hit all-time highs," said JJ Kinahan, chief market strategist at TD Ameritrade, in a press release announcing the findings of the index.
The stocks that TD Ameritrade clients were interested in during November include AT&T Inc. (T), which the brokerage said customers were net buyers of following the news that the U.S. Department of Justice launched a lawsuit to block its merger with Time Warner Inc. (TWX). Customers were also buyers of General Electric, which sunk to a five-year low during November after cutting its dividend, as well as NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc. (AMD), Micron Technology, Inc. (MU), Alibaba Group Holding Limited (BABA), JD.com, Inc. (JD) and Tencent Holdings Limited (TCEHY). The latter three are all Chinese technology-related companies. Tesla, Inc. (TSLA) was also popular among TD Ameritrade clients, as was Square, Inc. (SQ), Facebook, Inc. (FB) and PayPal Holdings, Inc. (PYPL).
TD Ameritrade noted that, during November, investors positioned for more exposure to equity markets as most of the major indices hit all-time highs, including the S&P 500, which touched the 2,600 mark for the first time ever.
In October, TD Ameritrade was already seeing signs that customers were stepping up their investments in stocks after inching away from equity investing in September. According to the online brokerage, its IMX increased to 7.4 in October after coming in at 7.14 for September, equating to a jump of close to 4%. The online trading firm said that October was characterized by strong U.S. markets, positive quarterly earnings on behalf of all sorts of companies and a global economy that is strengthening. Taken together, that appeared to influence retail investors' behavior on the positive side.