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Retail Investors Buying Stocks More Aggressively Than at Any Time in Last 1 ½ Years

By Dan Weil   |   Wednesday, 06 Mar 2013 08:09 AM

Retail investors purchased stocks more aggressively in February than at any time in the last 20 months, according to a sentiment index from TD Ameritrade.

Its Investor Movement Index (IMX) registered 5.14 for the four weeks ended Feb. 22, up from 4.71 in January, and the highest since June 2011. The index is compiled with information from TD Ameritrade’s 6 million accounts.

The index was weighed down in January by the fiscal cliff issue and annual portfolio adjustments, Steve Quirk, senior vice president of TD Ameritrade, said in a press release.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

“Now that those events are behind us, we are seeing results more aligned with national consumer sentiment indices,” he said.

The survey indicates investors were purchasing recent underperformers, such as Apple, Facebook, and Intel, CNBC reports. Investors sold recent high flyers such as Netflix and JPMorgan Chase.

"There is an underlying bid by retail in this market," Quirk tells the network. "There was a broader rotation out of stocks hitting multi-year highs and into stocks that have underperformed as of late."

The IMX Index is supposed to be predictive, so if it’s correct, the stock market has more gains in store.

Many stock market participants are bullish, as major indices reach five-year highs.

“Excluding this quarter, which will be impacted by the sequester, the economy probably strengthens as the year goes on,” Michael Mullaney, chief investment officer at Fiduciary Trust, tells Bloomberg.

“The Fed is going to be our friend for an extended period of time, and as the old adage goes, don’t fight the Fed.”

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

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Retail investors purchased stocks more aggressively in February than at any time in the last 20 months, according to a sentiment index from TD Ameritrade.
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2013-09-06
 

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