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TD Ameritrade's Investor Movement Index: Equity Exposure Decreases, But Bullish Trends Continue

TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD), is today releasing the Investor Movement Index SM score for January 2013. The Investor Movement Index, or the IMX SM, is a proprietary, behavior-based index created by TD Ameritrade, which aggregates Main Street investor positions and activity to measure what investors are actually doing, and how they are actually positioned in the markets.

The January 2013 (as of Jan. 25, 2013) Investor Movement Index reveals:

  • Score: 4.71
  • Trend Direction: Negative
  • Trend Length: 1 Month
  • Score relative to historic ranges: Moderately High

As the markets approached five-year highs in January 2013, retail investors at TD Ameritrade were net buyers of equities. However, they purchased and held equities with lower beta weighting than those purchased and held in December 2012, producing less exposure to the equity markets and a lower IMX score for the month. Retail investors appear to be bullishly positioned in the markets, as the latest IMX score is still high relative to the overall historical trend of the index.

“With the markets hitting multi-year highs in recent weeks, this activity makes a lot of sense. Reducing a portion of their equity exposure is prudent,” said Steve Quirk, senior vice president of TD Ameritrade's Trader Group. “Using education and the tools and research now available, our clients appear to be very tuned-in to the market.”

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.

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