Retail investors were net buyers last month, with the strongest activity in the second week of March as the S&P 500 came off new record highs. That week tension in Ukraine and signs of economic slowdown in China brought stocks lower which investors used as a buying opportunity.
TD Ameritrade Holding AMTD +0.26%’s monthly look at its 6 million clients’ trading activity shows that retail investors remained active in March as the firm’s Investor Movement Index jumped to 5.87 from a previous record high of 5.74 in January. The index had risen for six months in a row, the longest growth streak since a nine month run from fall 2010 to summer 2011.
The net buy was wide spread but particularly pronounced in dividend payers. Nicole Sherrod, managing director of TD Ameritrade’s trader group, pointed out that in times of political uncertainty investors tend to gravitate toward high yielding names.Stocks like Kinder Morgan KMI +0.5% and Verizon Communications VZ +0.71% which have dividend yields over 4% were popular in March.
Facebook was a net buy as shares of the social network came off of near 52-week highs. The stock had big gains in February off of a strong fourth quarter earnings report and news the it had acquired messaging service WhatsApp for a staggering $19 billion. But the stock shed about 12% of its value in March. Retail investors used this as a chance to buy up shares of the social network. Volatility also led to a net sell for Chinese internet giant Baidu , while Google GOOG +2.22% was bought up in anticipation of its stock split.
A more surprising net buy was Walt Disney DIS -0.3%. The happiest stock on earth doesn’t usually get enough action to register on the IMX but investors bought as shares went down to the $78 range. The stock was also helped by the success of Frozen, the highest grossing animated film of all time. Sherrod noted that in this case investors were buying on both strength and high hopes for future innovation.
On the other hand, retail investors were took profits from high flying names like Apple AAPL +0.16%, CaterpillarCAT +1.47% and Microsoft MSFT -0.48%. “Keep in mind that Apple has always been one of the most widely held names among our clients,” said Sherrod. The stock climbed in mid-March off of a late-February drop off. Investors sold off as the stock approached its previous high. Caterpillar and Microsoft were similarly ripe for profit taking as two of the Dows’ first quarter top performers.
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