Retail traders are net buyers as 2022 begins, but higher interest rates and a strong move into treasuries pushes score lower

The Investor Movement Index^® (IMX^SM) decreased to 7.07 in January, down from 7.97 in December. 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 January 2022 Investor Movement Index (Graphic: TD Ameritrade)

The reading for the five-week period ending January 28, 2022 ranks “Moderately High” compared to historic averages.

“Volatility defined the month of January, and our clients continued the trend of lowering market exposure as we face many uncertainties, including interest rate increases, inflation and geopolitical risks,” According to JJ Kinahan, chief market strategist, TD Ameritrade. “As may be expected in times of uncertainty, we saw many clients made their way into treasuries, until they get a clearer picture on Equities.”

January began with opportunistic buying as indicated with buying interest in equities, though this led to a tapering of demand and, ultimately, lower levels of purchasing in the latter half of the month. The month finished with a couple of strong sessions but still ended as the worst month for the market since March 2020, and the worst start to a year since the global financial crisis. Volatility heightened as the Fed indicated it may start hiking rates in March, and global central banks are expected to begin or continue tightening their monetary policies as well, with the Bank of England and the European Central Bank set to meet in early February. Trading in January was marked by selling in some of areas of the market with more price inflation, particularly unprofitable tech companies, and a general rise in volatility as markets braced for sustained volatility.

TD Ameritrade clients were net buyers of equities in January. Some of the popular equity names bought in January were:

• NVIDIA Corporation (NVDA)
• Microsoft Corporation (MSFT)
• Rivian Automotive (RIVN)
• Block Inc. (SQ)
• Walt Disney Company (DIS)

While the market started the month with a strong move to the downside, some companies did not sell off immediately and clients used this strength to exit some positions. Names sold during the period included:

• Carnival Corporation (CCL)
• Exxon Mobil Corporation (XOM)
• Walmart Inc. (WMT)
• Visa Inc. (V)
• Zoom Video Communications Inc. (ZM)

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 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 January 2022, 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

TD Ameritrade provides investing services and education to self-directed investors and registered investment advisors. A leader in U.S. retail trading, we leverage the latest in cutting edge technologies and one-on-one client care to help our clients stay on top of market trends. Learn more by visiting www.amtd.com.

Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org) / SIPC (www.SIPC.org), a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2022 Charles Schwab & Co. Inc. All rights reserved.

Source: TD Ameritrade, Inc.

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