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So what were US share traders into in 2016, and how were they buying and selling last month (December)? Data published by TD Ameritrade as part of its proprietary Investor Movement Index reveals some interesting insights into the mentality driving US retail traders and investors.

The index aggregates the positions of thousands of investors and their positions to measure activity around some of the big names in US stocks. The index ended the year on a slightly negative trend as markets came off all-time highs and some investors trimmed their exposure going into the end of the year, particularly as volatility declined in some blue chips like Apple and General Electric.

Amazon and Facebook remained firm favourites in the final quarter of 2016. Teva Pharmaceutical and Dry Ships were also net buys, despite recent declines in price. Nvidia Corp, one of the best performing stocks in the S&P 500 in 2016 also enjoyed some love.

But what were investors selling? Apple was sold off a little towards the year end as were names in the energy sector, like ConocoPhillips and Chevron Corp. This despite the rise in the oil price, which passed $50.

Investors are always a little wary of year-to-date highs, and this was obviously the case with Citigroup and Wells Fargo, both of which also went into the net sale bucket.

Unsurprisingly, TD Ameritrade clients were net buyers of stocks in 2016 – particularly following the US election in November, as the Dow probed historic highs. Alphabet, Gilead Sciences and Valeant Pharmaceuticals were all very popular stocks to own in 2016.

Equity investors had shied away a little from the market early in the year, as the sell-off in China spooked many. Brexit was also a big concern, with equity investors selling into the vote in June.

“Brexit was the year’s biggest trading event for TD Ameritrade clients,” says Steve Quirk, executive vice president of the Trader Group in Omaha. “Not only was June 24 the top trading day of the year overall, it was the number one day for equity and options trades for retail clients.”

Overall, the company’s clients favoured equities, with 55% of trades in the physical share market. Options accounted for 31% while futures and forex trading made up 12%.

Big name shares continued to feature in retail portfolios at the end of the year, with Apple, Facebook, AT&T and General Electric ranking as the top holdings.

Top five stock buys in 2016:

  • Amazon
  • Facebook
  • Valeant Pharmaceuticals
  • Gilead Sciences
  • Alphabet

Source – TD Ameritrade Holding Corp

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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