The S&P 500 tumbled in October, but that didn't stop individual investors from adding to their stock portfolios.
The behavior-based TD Ameritrade Investor Movement Index, or IMX, which aggregates Main Street investor positions, rose 6.2% to 5.83 in October as retail investors increased their exposure to the U.S. equity markets for the third month in a row. The S&P 500 was down about 2% in October, while the VIX, or so-called fear index, ticked higher over the course of the month from 13 to 17.
"Retail investors are actually looking beyond the election and setting themselves up for 2017," said J.J. Kinahan, chief strategist at TD Ameritrade (AMTD) .
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.
Amazon (AMZN) , which saw declines late in the period following their earnings announcement, was a net buy in October, according to TD Ameritrade. The online retailer set a new all-time high early in October, but did not hit earnings estimates when it announced its quarterly results later in the month.
"Clients anticipate a strong holiday season, so they are streaming into Amazon early," said Kinahan.
Continuing a trend from last month, dividend payers Verizon Communications (VZ) and AT&T (T) were net buys. Each of these stocks saw their yields rise in October as their share prices declined. Facebook (FB) , which set another all-time high early in October, remained a popular net buy as well, according to TD Ameritrade.
On the flip side, money center banks Citigroup (C) and Bank of America (BAC) , both saw gains during October, but were net sold by TD Ameritrade clients. Other high profile names that were net sold by TD Ameritrade's clients included Netflix (NFLX) , Southwest Airlines (LUV) and Caterpillar (CAT) .