Retail traders tracked by TD Ameritrade remained cautious in March, cutting back on their equity market exposure for the third month in a row, according to the Investor Movement Index®, or the IMXSM.
The IMX decreased to 4.33 in February, marking a new 52-week low. Last month, we posed the question of whether the market’s then fledgling recovery would lead to investors dipping their toes back into stocks. The market continued to recover in March, but retail traders were careful not to venture in too quickly, perhaps because last fall’s rally ended so abruptly, but also because they were taking profits during the market uptrend.
In the accompanying video, you’ll get my take on the March IMX reading and learn which stocks TD Ameritrade clients were buying and selling during the month. I’ll tell you this much: Entertainment and technology names remain popular, and some retail investors are trying out the energy sector once again. Maybe they’re hoping the recent rally in crude oil from February’s decade lows could be a sign of economic vigor. We’ll see.
Remember, this sophisticated index is a tool that lets you see what hundreds of thousands of actual traders were doing in March across all markets. While retail traders didn’t get bullish enough to dive back into stocks last month, it’s worth watching to see what they’ll do in April if strength in equities and low volatility continue.
Until next month,
Learn more about the IMX and how it can help you understand the markets.