The Investor Movement Index® (IMXSM) decreased to 5.41 in November, down 4.92 percent from its October score of 5.69. The IMX is TD Ameritrade’s proprietary, behavior-based index, aggregating Main Street investor positions and activity to measure what investors actually were doing and how they were positioned in the markets.
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TD Ameritrade November 2020 Investor Movement Index (Graphic: TD Ameritrade)
The reading for the four-week period ending November 30, 2020 ranks “Moderate Low” compared to historic averages.
“In November, markets climbed to historic highs and many of our clients took the opportunity to capitalize with strategic selling,” said JJ Kinahan, chief market strategist at TD Ameritrade. ”Although the markets continued to rally, many of our clients appeared to use this as a time to take profits and reassess their market views as we head in to the last month of 2020.”
Equity markets posted strong gains during the November IMX period. Markets increased early in the period following the U.S. election, with the expectation that a divided government would likely result in modest measures on taxes and spending. All three indices reached all-time highs as news of the election results came in, with the Dow industrials surging about 1,500 points in one day to an intraday record. The markets took a brief pause as the death toll from the coronavirus pandemic topped 250,000 in the U.S., with hospitalizations reaching a record high. Unemployment claims also rose unexpectedly as the virus continued to limit the economic recovery. Positive news concerning COVID-19 vaccines pushed markets higher, with Pfizer and partner BioNTech reporting better-than-expected results of more than 90 percent effectiveness for its vaccine in a pivotal study, and, later in the month, Moderna sharing its own study results that its own experimental coronavirus vaccine was 94.5 percent effective in protecting against the virus. With the resulting wave of optimism, the Dow Jones Industrial Average topped 30,000 for the first time ever.
For the first time since February 2020, TD Ameritrade clients were net sellers overall and net sellers of equities. Amid the selling, they were net buyers of Health Care. Some of the popular names bought during the period were:
- Pfizer Inc. (PFE)
- Alibaba Group Holding Ltd. (BABA)
- DraftKings Inc. (DKNG)
- Amazon Inc. (AMZN)
- Plug Power Inc. (PLUG)
TD Ameritrade clients took advantage of markets at all-time highs early in the November period to sell, and decreased holdings in Financials, Industrials, Communication Services, and Energy. Names net sold during the period included:
- Bank of America Corp. (BAC)
- JP Morgan Chase & Co. (JPM)
- The Walt Disney Company (DIS)
- Micron Inc. (MU)
- Starbucks Corp. (SBUX)
About the IMX
The IMX value is calculated based on a complex proprietary formula. Each month, TD Ameritrade pulls a sample from its client base of more than 13 million funded accounts, which 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 January 2010; to view the full report from November 2020; 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 thinkorswim Mobile platforms.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold. All investments involve risk including the possible loss of principal. Please consider all risks and objectives before investing.
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.
About TD Ameritrade
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Sr. Manager, Corporate Communications