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The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance. The DII is for informational purposes only. Any information provided through the DII should not be considered an investment recommendation, nor is it an offer, or solicitation of an offer to purchase or sell any investment fund, security or other product.
Investors should not take the historical information as an indication, assurance, estimate or forecast of future values or future performance. The DII should not be used as individual financial, legal, investment or tax advice. Information provided through the DII is subject to change without notice. They may also make a market in, issue, and participate in an underwriting of such securities.
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A higher level of market knowledge, risk tolerance and net worth is required. TD Bank Group means The Toronto-Dominion Bank and its affiliates, who provide deposit, investment, loan, securities, trust, insurance and other products or services. We arrive at the most salient proxies using the 3-step proxy selection process. They are subject to change based on future data. To determine the monthly sentiment of self-directed investors, we analyze these criteria for the last month:. Sold : Measures net equity demand—whether investors were buying more or selling more in a specified month.
I'm Anthony Okolie. And this is a look at the TD Direct Investing Index for the month of July, a snapshot of how self-directed investors were feeling based on what they did. And after two months of bullish sentiment hovering around 50 in the TD Direct Investing Index, keep in mind, it's a range from minus to plus July sentiment dropped 50 points from June to only plus 2 from bullish to neutral.
And it's a low sentiment in three months. A few key points here. Sentiment on materials, particularly commodities, was the lowest of all sectors, pulling the overall sentiment down. When you break things down by activity, long-term investors who have less than 29 trades in the previous quarter were more pessimistic than active traders, the traders that had 30 or more trades in the previous three months.
When you look at age, baby boomers who were born between to were the most pessimistic age group. Now let's take a look at the sentiment proxies or the DI ruler board. This is the total investor activity that makes up the sentiment. And there was more chasing stocks at 52 week highs, came in at plus 47 score in July, which is interesting, but at the same time, the flight to safety move from investors, as you can see, pulled the overall sentiment down from bullish into neutral territory.
Now, in terms of sector activity, investor sentiment on materials was very negative, pulling sentiment down. And health care and energy were also slightly negative, with the exception of gold stocks like B2Gold Corporation and energy giant Suncor, which saw heavy buys. Meanwhile, technology was by far the most positive sentiment, with the rest of the sectors very close to neutral. Now let's dig into more detail specifically of who was doing what. Here, we have two main categories.
In terms of trading styles, active investors were more optimistic than long-term investors. And active traders, their DII sentiment came in at plus 8. When look at the key tickers, most bought was Suncor and AMC. When we look at long-term investors, the sentiment came in at negative 6, and most bought included Air Canada and Suncor, among the most sold, Brookfield Properties and Apple.
And in terms of age, everyone was neutral to slightly bullish, with the exception of boomers, who are comparatively quite negative. And boomers came in with the sentiment of negative In terms of key tickers, most bought was Manulife Financial and Enbridge Among the gen Z and millennials, they were slightly bullish, with a DI sentiment score of plus 3.
Among the most sold was Shopify and Good Food. Now let's break it down by province. Sentiment was the most pessimistic in Ontario last month. Ontario and BC sentiment ended up slightly negative, while the Prairies, Atlantic Canada, and Quebec were slightly positive. Interesting to see Air Canada was the most traded stock right across Canada, but Suncor was the top bought stock, and Inter Pipeline was most sold in the Prairies.
And that's a roundup of what happened with DII in July. For more information on the DI index, please visit the link at the bottom. Hello, everybody, I'm Kim Parlee. And this is a look at the TD Direct Investing Index for the month of August, a snapshot of how self-direct investors were feeling, but based on their activity in the month of August.
There's three key takeaways we want to talk about. First, the DII came in at plus 9 for August. Now keep in mind, the range is minus being the most bearish to plus being the most bullish. Plus 9 for this month of August came in just a couple points higher than we saw in the previous month.
So we're seeing a little more bullishness in the market. But it is well below the plus 50 that we had in August at this time last year. Second takeaway-- for the first time in nine months, long-term investors were more optimistic than active traders. And third of all, traditionalists, who are of course a little older, perhaps a little wiser, were the most optimistic.
And Gen Xers were actually the most pessimistic in the month of August. All right, let's dig into some of the internals in terms of what makes up the DII. These are the four components, a couple of notable pieces we'll pull out here. We're continuing to see more chasing stocks at week highs.
That came in at plus And also interesting, the flight to safety or risk appetite-- interesting indicator. The more negative this number is, it's actually more bullish for the overall index. If we take a look at the sectors on the month of August, investors were most bullish on financials, most bullish on health care.
And the overall sentiment was pulled down a bit by bearishness in materials. If we dig a little bit more into trading styles, long-term investors, more the buy and hold, they came in at plus 8. They were more bullish than they were last month. And if we take a look at some of the specific stock activity-- we're going to take a look at some of the most net bought and net sold stocks. Now again, these are buys less sells to give you context.
So for the long-term investor, the most net bought were Suncor, Enbridge, and Amazon. Now if we take a look away from trading styles in terms of activity in the market and into age groups, traditionalists, as I mentioned earlier, were the most bullish. They came in at plus 4. Some of the most notable tickers, we had the most net bought being Enbridge, Suncor, and Telus.
Gen Xers were the only bearish age group in the month of August. Their DII came in at minus 3. Particularly, that bearishness really showing up in materials and IT. And finally, if we take a look at province, Ontario was by far the most bearish of all the geographies that we measure in the DII for August. It came in at minus 8. Quebec came in at plus 4. And the prairies came in at plus 4. And they were more optimistic, lifting the sentiment-- that is, both Quebec and prairies.
In terms of Ontario, we saw a lot of bearishness in materials and IT stocks, some selling activity there. And in the prairies, where we had a little more bullishness, they showed a preference for health care and IT stocks. For more on DII, please click on the link at the bottom of the screen. And this is a look at the TD Direct Investing Index for the month of September, a snapshot of how self-directed investors were feeling based on their activity last month.
And here are three key takeaways. First, investors continued to be bullish. The DII score came in at plus 37 for September. Keep in mind, the range is minus being the most bearish to plus being the most bullish. Now plus 37 for this month of September came in much higher than we saw in the previous month. So that appears to indicate that investors expected that markets to continue to rise. Second takeaway, energy ruled in September.
It registered the high sentiment of all sectors. Sentiment on materials, on the other hand, that includes gold and commodities, had the lowest score. It was also the fourth straight month of pessimism for materials since June. And lastly, we saw Boomers, those born between to , they are the most optimistic bunch compared to other generations. We continue to see more buying stocks at week highs, came in at plus Also interesting, the flight to safety or risk appetite, a less negative value means risk on or less actual flight to safety, hence a bullish sentiment.
And flight to safety was minus That's lower than last month, indicating investors were more likely bullish on equities. Now let's take a look at sectors overall. In September, trading came down to a tale of two sectors, energy and materials. Investors were bullish on energy, the DII score coming in at plus On the opposite end, investors were bearish on materials, with a score of minus Boomers, having the highest exposure to both sectors versus other ages, drove both the buying and selling during the month.
The most bought stocks in energy included Tourmaline, Enbridge, and Suncor. Now let's dig into trading styles. These are long-term investors who are more the buy and hold type. They were the most optimistic at plus 28, much higher than last month, while active traders were less optimistic at plus 9. When we look at trading activity based on age, Boomers, as I mentioned before, were the most bullish with a DII of plus 20, much higher than last month. And specifically, we saw heavy buying in Canadian Pacific Railway and Apple.
Conversely, we saw the most selling in Canadian National Railway and Suncor. And finally, if we take a look at province, Alberta and the prairies were by far the most bullish of all the geographies that we measured in the DII for September. It came in at plus Now energy, being the biggest driver of sentiment there, indicating some home bias. Now energy wasn't just strong in Alberta.
It was also the leading sector in Ontario. And this was especially surprising given the province's typically lower portfolio weighting in the sector. It also indicated the overall strength of the energy sector. And that is a roundup of what happened with the DII for September For more on DII, please go to the link at the bottom of your screen. Hello, I'm Anthony Okolie. And this is a look at the TD Direct Investing Index for the month of October, a snapshot of how self-directed investors were feeling based on their activity last month.
First, overall self-directed investors were again substantially more bullish with a sentiment of plus 52 from October. Now keep in mind, the range is minus being the most bearish to plus being the most bullish, and plus 52 was slightly better than last month at plus It was also the third straight month of market optimism. Now, versus October of last year, it was a big jump when sentiment was plus Second, baby boomers-- those are investors born between to again were the most optimistic bunch compared to other generations for the second straight month.
And lastly, the material sector got its groove back. It registered the second highest sentiment of all sectors. Meanwhile, energy sentiment continued to lead to confidence across all sectors for the second month in a row. Next, let's look at the components which make up the DII.
Again, we saw more buying stocks at 52 week highs. When we look at flight to safety or risk appetite, what we saw was a pretty strong bullish indicator. It came in at minus 32, which was less negative month over month, indicating more risk on last month. If we dig a little bit more into trading styles, we're seeing an interesting trend here.
Long-term investors-- that's more the buy-and-hold style-- were again the most optimistic at plus That's higher than last month. Now, while active traders were less optimistic, at plus Now let's take a look at the sectors overall. October trading once again centered around two sectors, energy and materials. Investors were again bullish on energy with a reading of plus 19, although that was down from plus 53 in the previous month.
And investor sentiment swung from pessimism to optimism on materials with a reading of plus When we look at trading activity based on age, the different generations gravitated towards different investing strategies. Boomers, as I mentioned before, were the most bullish with a reading of plus 21, just slightly higher than last month.
Specifically, Boomers favored traditional energy names like Suncor Energy and Enbridge. Conversely, stocks that featured prominently for younger generations, Gen X, Z, Y, and millennials, were Tesla and Facebook. And finally, if we take a look at province, overall sentiment was the highest in Ontario with a reading of plus That's up 14 month over month.
That was followed by BC with a reading of plus 8, up 9 month over month. And that is a roundup of what happened with the DII in the month of October For more on DII, please go to the link at the bottom of the screen. And this is a look at the TD Direct Investing Index for the month of November, a snapshot of how self-directed investors were feeling based on their activity last month.
Self-directed investors were again bullish with a sentiment of plus 21 for November, but that was a big drop of 31 from October. A series of negative headlines rocking stock markets at month-end may have tempered further optimism. Now when we compare sentiment to November of last year, it was a big drop when sentiment was at plus Here are three key takeaways. First, the East Coast stood out with the highest overall sentiment in November.
Investors in Atlantic Canada were the most optimistic compared to all other regions. Second, baby boomers born between to were the most pessimistic bunch last month, a big U-turn from optimistic sentiment the prior month. Also, Gen Z and millennials were the most optimistic age group. And lastly, sentiment on IT was the highest of all sectors. However, sentiment for materials and financials turned negative.
Next, let's take a look at the components which make up DII. Again, we continue to see more buying stocks at week highs with a reading of plus When we look at flight to safety or risk appetite, what we saw was a strong bearish indicator of minus 49, which was more negative month over month, indicating more risk off last month. When we break down the data by trading styles, active traders were the most optimistic at plus Long-term investors, more the buy-and-hold style, became less optimistic at plus 2, a significant pullback from last month's reading of plus It also marked the low sentiment over the past four months, something we'll keep an eye on.
When we break things out by region, overall sentiment was the highest in Atlantic Canada with a reading of plus 7. That's up 4 month over month. Now some interesting points here. Firstly, sentiment was positive across every sector.
Secondly, demand for IT stocks was four times the next most favored sector in Atlantic Canada, which was materials. Most bought stocks were in IT. Most sold stocks-- Suncor, Tesla and Enbridge. Now when we look at trading activity based on age, youth was definitely served last month with Gen Z and millennials feeling the most optimistic with a reading of plus 6.
Most sold last month-- Air Canada, Suncor and Apple. And finally, when we take a look at sectors, investors were the most bullish on IT with a DII score of plus That's up significantly from neutral last month.
And trading in November saw sentiment turn negative for materials at minus 3. Again, materials includes gold and copper. It was also negative for natural stocks, which came in at minus 2. And this is a look at the TD Direct Investing Index for the month of December, a snapshot of how self-directed investors were feeling based on their activity last month.
First, investors remain bullish, continuing a streak of nine straight months of positive investor sentiment. Second key takeaway, big banks were booming. Financials boasted the highest sentiment of all sectors on the tail of strong fourth quarter results. And lastly, the oldest investors are traditionalists, born between to , and the Gen Xers, born between to , were the most optimistic bunch compared to all other age groups.
Now, let's take a look at some of the components which make up the DII. We saw a modestly bullish sentiment overall month over month. That's an increase of 14 month over month, indicating investors bought stocks in a rising market. Finally, flight to safety or risk appetite. A more negative value means risk off or more actual flight to safety. So flight to safety was last month. Again, that was lower than the previous month, indicating a strong bearish indicator.
Next, let's take a look at sectors overall. Among the most bought stocks in financials, Scotiabank and Manulife. Investors, however, were bearish in materials in December with a DII score of , especially boomers and BC residents, where the flooding there may have dampened sentiment. Top stocks sold in materials included Lithium Americas Corp. That's up slightly month over month.
And not surprisingly, the oldest generation favored dividend-paying stocks, stocks such as Enbridge and TD Bank, which were among the top bought for the month. Meanwhile, Gen X, including the Gen Z and Millennials who were born after , they instead gravitated to high growth stocks, like Tesla, while industrial stock, Air Canada, also ranked in the top bought.
And finally, when we break things out by province, some interesting insights here. First, Ontario was by far the most bullish region, with financials being the biggest driver. Secondly, as most big bank head offices are stationed in Ontario, it highlighted some strong home bias that saw Ontario residents significantly overweigh bank stocks.
And that's a roundup of what happened with DII for December And this is a look at the TD Direct Investing Index for the month of January, a snapshot of how self-directed investors are feeling based on the activity last month.
The streak of bullish sentiment continued for a tenth consecutive month, despite a volatile start to the year for equity markets. The TD Direct Investing Index, keep in mind it ranges from minus for very bearish to plus for very bullish. Sentiment inched four points higher, to plus 24, in January.
Now, compared to January of last year, it was a modest increase, when sentiment was at plus First, it was a tale of two nations, Canada versus the US, with positive sentiment on equities more evident on the Canadian side of the border. Self-directed investors liquidated US equities in January, in sharp contrast to the fund inflows towards Canadian equities. Second key takeaway, technology stocks fell out of favor, pulling the overall sentiment scores down.
Meanwhile, energy and financials, which, combined, account for roughly half of Canada's value-heavy benchmark index, boasted the highest sentiment of all sectors. And lastly, the older generations-- that's the baby boomers, which are born between to , and traditionalists, born between to were the most optimistic compared to any other age group. Next, let's look at the components that make up the DII. Again, we saw modestly bullish sentiment overall month over month. We continued to see investors who bought stocks at week highs with a score of plus That's up 12 points month over month.
At the same time, flight to safety or risk appetite from investors, as you can see, was minus That's seven points higher than last month, a less bearish indicator. However, we also saw a drop in the bought versus sold trends or net equity demand to minus 6, indicating investors were doing more selling than buying of stocks last month.
Energy was on fire to start , lifting overall sentiment higher with a score of plus 24 last month. Suncor, Enbridge, and Crescent Point Energy Corporation led the way among the top bought stocks in the sector. Meanwhile, bullish sentiment for financials continued last month, with the DII inching up one point to plus Expectations of higher interest rates and, in turn, higher bank profits likely drove optimism for Canadian financials, with Royal Bank of Canada, Toronto-Dominion Bank, and Bank of Nova Scotia among the most bought.
On the downside was technology, where sentiment dropped 18 points, to minus 13, Shopify, Apple, and Nvidia Corporation being some of the top sold securities in IT. Now let's dig a little bit more into trading styles. Active traders-- they have over 30 trades in the past three months-- were clearly chasing trends, driving their sentiment higher again, to plus Meanwhile, long-term investors, more the buy and hold style, were less optimistic, at plus 3.
When we look at trading activity based on age, baby boomers were the only age group that turned more optimistic, with a DII score of plus 6. That's up nine points month over month. Traditionalists were slightly less bullish with a score of plus 6, down three points month over month. Some interesting points here. First, financials were popular across all age groups, led by boomers and traditionalists.
Secondly, Tesla and Shopify continued to be among the most bought stocks across most age groups and provinces. And finally, when we break things out by province, bullish sentiment in Ontario slipped last month, with technology the biggest drag on optimism. Meanwhile, investors in Ontario were the most optimistic on energy, followed by the energy heavy regions in Alberta and the prairies. I am Anthony Okolie, and this is a look at the TD Direct Investing Index for the month of February, a snapshot of how self-directed investors were feeling based on their activity last month.
In February, the Russia-Ukraine conflict rattled equity markets. But despite the uncertainty and volatility, self-directed investors were feeling substantially more bullish, with a sentiment of plus 60, which is the high sentiment since November of , when the landmark COVID vaccines were announced. Now, February's sentiment score was 36 points higher compared to January's sentiment, and versus February of last year, a significant jump, when sentiment was at plus 4. Now here, let's take a look at the highlights that stood out.
First, sentiment in energy climbed higher in February, as the Russian-Ukraine conflict helped lift oil prices to seven-year highs. Not far behind were materials, which includes precious metals and base metals. They staged a stunning comeback in February, as investors flocked to gold. Second key takeaway-- all age groups were bullish in February. However, the Baby Boomers, born between to , were by far the most optimistic, lifting overall sentiment.
And lastly, self-directed investors in Ontario were the most optimistic of all provinces, favoring the energy and material sector. Next, let's take a look at the components that make up the DII. Sentiment was more bullish overall month over month, and we saw an increase in investors who bought stocks at week highs with a score of plus Now, that's up 9 points month over month.
Another bullish indicator was chasing trends. A positive value indicates that self-directed investors bought securities when share prices were increasing. If it's negative, self-directed investors bought when share prices were falling. And chasing trends was plus 34, indicating that investors were buying more on a rising market in the month of February.
Finally, flight to safety or risk appetite from investors, as you can see, was minus That's 3 points higher than it was last month, a less bearish indicator. Amid record high energy prices, investors piled further into the energy sector, boosting sentiment higher with a score of plus That's up 7 points month over month.
Now close behind were materials, which saw sentiment rise 29 points month over month to plus On the downside, again, was technology, with a sentiment score which remained at minus 13, Shopify, Lightspeed, and Nvidia Corporation being some of the top sold stocks in IT. Now let's take a look at trading style. Long-term investors, which are more the buy-and-hold style, were significantly more optimistic last month at plus 32, again favoring the energy and material sectors.
When we look at trading activity based on age, while sentiment was positive for all groups, Baby Boomers stood out as the most optimistic of the bunch, with a sentiment score of plus That's up 21 points month over month. And finally, when we break things out by province, bullish sentiment in Ontario increased last month, with energy and materials being the biggest boost to sentiment.
The energy-heavy provinces, Alberta and the Prairies, not surprisingly, were also optimistic on energy. And that's a roundup of what happened with the Direct Investing Index for the month of February Despite the continued uncertainty and volatility in equity markets, self-directed investors were still feeling very bullish. The DII sentiment score for March was plus Keep in mind, it ranges from minus being the most bearish to plus being the most bullish.
And this continued a trend seen over the last few months, where retail investors exhibited positive sentiment around investing, despite increasing geopolitical tensions. Month over month, sentiment fell nine points, but versus March of last year, a significant jump when sentiment was bearish at minus two. A few key points stood out here. First, materials and energy were again favored by retail investors, a validation of Canada's natural resource-heavy index.
Second takeaway. Gen Z and millennials, born after , were the least optimistic as tech stocks continued to tumble. And lastly, a preference to buy Canadian stocks was evident last month, with Alberta and the Prairie provinces being overweight energy and materials.
We continue to see investors who bought stocks at week highs at plus 63, but that's down 5 points month over month. We did, however, see a bit more buying activity than selling in March, with a score of plus That's up 11 points month over month and contributed to the positive sentiment.
Finally, flight to safety, or risk appetite from investors, as you can see, was minus That's seven points lower month over month, a more bearish indicator. Keep in mind, a more negative value means risk off, or more actual flight to safety. Next, let's look at the sectors overall. March trading, once again, was centered around two main sectors-- energy and materials. And investors piled further into the materials sector, boosting sentiment higher with a score of plus That's up 6 points month over month.
Nutrien, Teck Resources, and Barrick Gold were among the most bought. Investors were once again bullish on energy with a DII score of plus 18, although that's down from 31 last month. Now if we look at investors' trading style, sentiment was equally optimistic among long-term investors-- they're the more buy-and-hold style-- and active investors, who have 29 or more trades over the past quarter.
And when we look at trading activity based on age, bullish sentiment was lowest for the Gen Z and millennials at plus five. That's down slightly, two points month over month. Among the top sold were Tesla, Suncor, and Shopify. Meanwhile, traditionalists born between to became more optimistic in March with a score of plus That's up 8 points month over month.
And finally, when we break things out by province, sentiment in Ontario remain optimistic, followed by BC, Alberta, and the Prairies, where preference to buy Canadian stocks was evident amid the optimism for energy and materials. And that's a roundup of the DII for March, Open an account. TD Direct Investing Index Wonder how other self-directed investors have been feeling about the market? Now you'll know. Overall self-directed investor sentiment was up. Watch this video. Overall self-directed investor sentiment was down.
Insights: How were self-directed investors feeling about the markets last month? Un-slumping yourself is not easily done Materials weighed heavily on August's overall sentiment. The August Doldrums Meh. Read more. Materials lose their shine The Materials sector was the main negative weight on the DII in September, dropping to a low of — What influences the influencers?
Grey Power Energy sentiment continued to lead confidence in all sectors for the second straight month. YouthQuake 2. The Big Reveal So. November Atlantic Canada was feeling the love Read more. Let's set the stage. Remember the market earthquake between February and March of when the impact of Covid finally sunk in? Well, in November , news of the Omicron variant may have caused yet another after-shock. Though equity prices were rising fast for most of November, the negative news headlines at the end of the month led in part to equity markets to pare back gains.
The TSX was up 0. So that's the background. Now, here's the big story. This change in sentiment wasn't shared equally across Canada. When we look at sentiment based on geographic location, a significant divide emerged. East coast showed us some love Let's start with the most optimistic region. What about your folks?
Now we will modestly quote our own paper, Understanding Investor Behaviour : "The actual investment decisions of individuals may be the most honest representation of investor feelings and beliefs. By looking at self-directed investor trading activity, we can see how people react to economic and financial market events…" In short, Atlantic Canada felt just fine in November.
January Canada vs. February Market turmoil and rebounding sentiment in the midst of a geopolitical crisis Read more. March What the Tech? Most popular securities self-directed investors. Press tab to go into the content. Shift-tab to return to the tabs. Last month's trend self-directed investors. Change in investments by industry sector. Ready to invest on your own? Learn more. Online trading and investing The WebBroker trading platform can make investing easy and accessible for investors with any level of experience.
Log in to WebBroker. Want to learn more? Were investors: Buying or selling more? Buying more on a rising market? Buying more at the top of the market or during a dip? Retreating to less risky investments? Assessing Existing Research on Sentiment Following the pioneering research by Baker and Wurgler and referring to the study in Delong, Shleifer, Summers, and Waldmann , investor sentiment is an emotional state of an individual investor.
Comparison of the DII and Other Models Nearly all the sentiment indices found in the literature presented above focus on abstracted market-level information as opposed to the actual transactions of an investor analyzed in aggregate.
Review of Other Measures of Sentiment There are three main approaches to measuring investor sentiment. In this study, several market variables are proposed in constructing the sentiment: Trading volume, or liquidity, increases when investor sentiment is optimistic Dividend premium is inversely related to sentiment Closed-end fund discount increases when investors sentiment is low Initial Public Offering IPO first day returns often earn remarkable returns that is in part fueled by investor sentiment.
When investor sentiment is high, people tend to buy-up and create demand for IPOs, pushing up prices. IPO volume is very sensitive to investor sentiment Equity issues over total issues is a broader measure of equity financing activity that reflects a firm shifting between equity and debt and often relate to positive investor sentiment The authors apply a principal component analysis PCA, see glossary on the proxies, which have previously been regressed against key macroeconomic factors to remove business cycle effects.
Selecting Proxies for the DII We utilize anonymous, security-specific transactions to build proxies for self-directed investors from different segments such as age group, geographical region and trading style. In the second step of the procedure, we employed a proprietary statistical process which utilizes dimensionality reduction techniques PCA to further reduce the proxy space In the final step, we use a qualitative approach where we use expert judgement and effective challenge with subject matter experts to assess and validate the rationale for including various proxies in the sentiment index.
Following the three steps, we reduced the pool of candidate proxies 2 down to the four final proxies: Bought vs. Sold: Measures net equity demand—whether self-directed investors were buying more or selling more in a specified month. If positive, they bought more than they sold. If negative, they bought less than they sold. Flight to Safety: Measures how much self-directed investors were pulling back into safer, less risky investments.
If positive, self-directed investors traded in lower risk items such as cash, bonds, fixed income, and Money Markets. If negative, self-directed investors traded in higher risk items such as equities. Bought at Extremes: Measures if self-directed investors were buying at either the top or bottom of the market. If positive, self-directed investors placed trades on a rolling week high price.
If negative, self-directed investors placed trades in a market dip. A rolling week high or low means the highest and lowest price the security traded at during a one-year period back from today. The lowest price is often referred to as a market dip. Chasing Trends: Measures if self-directed investors bought securities on a rising or declining market.
If positive, it indicates self-directed investors placed trades on increasing share prices. If negative, DI investors placed trades on decreasing share prices. Performance of the Sentiment Model As mentioned previously, investor sentiment is an abstract concept that is difficult to quantify.
See glossary for definitions. Additional Insights from DII 3 As outlined at the onset of this paper, one of our key objectives was to understand the degree of diversification within self-directed investor portfolios, and whether bias influences investment decisions. Activity By Age Group In Canada, there was an interesting divergence between age categories for certain sectors. Care Ind. Real Estate Tech. Utilities TSX Concluding Thoughts In this paper we use the aggregated and anonymous trading data of TD Direct Investing self-directed investing clients to help build a measure of investor sentiment.
Glossary Normalization: In statistics and its applications, normalization refers to a process whereby values are adjusted to allow for meaningful cross-comparisons. Buy-call: a bullish trade that gives the buyer the choice to exercise the option, allowing them to buy the underlying security at the strike price Sell-call: a bearish trade that if exercised by the buyer, forces them to sell the underlying security at the strike price Buy-put: a bearish trade that gives the buyer the choice to exercise the option, allowing them to sell the underlying security at the strike price Vector autoregression estimation: This is a statistical technique used to capture the relationship between multiple quantities as they change over time.
All trademarks are the property of their respective owners. To determine the monthly sentiment of self-directed investors, we analyze these criteria for the last month: 1 Bought vs. Because it, itself, is a bearish indicator. So it came in at minus And that's a roundup of what happened with DII for November And that's a roundup of what happened with the DII in the month of January And this is a look at the TD Directed Investment Index for April, a snapshot of how self-directed investors were feeling based on their activity last month, which takes into consideration data from March 28 to April The DI sentiment score came in at minus 12, down 63 points month over month, which was the most bearish self-directed investors have been feeling since March , which was an unofficial start of the pandemic.
A few key points that stood out. First, energy again was the most favored sector by retail investors, while sentiment plunged for materials, which was the least liked sector. Second takeaway, baby boomers born between to did a dramatic about face last month, slipping from most optimistic to the most pessimistic age group in April.
And lastly, sentiment of all provinces tumbled last month. But Ontario was the most pessimistic. There was increased bearish sentiment overall month over month in the core pieces that make up the DII. Significantly, we saw fewer self-directed investors buying at the top of the market. The proxy for chasing stocks at 52 week highs was plus 28 in April, down a whopping 35 points month over month, which helped us get to more bearish.
In April, sentiment was positive for energy stocks, at plus That's modestly lower by 7 points month over month. While materials became the most pessimistic sector at minus 14, down 40 points month over month. If we look at investor trading styles, sentiment was almost equally pessimistic among long term investors, which are the more buying the hold, and active investors, which have 30 or more trades in the past quarter.
And when we break it down by age, and it didn't matter how old they were, the sentiment dropped across the board, with baby boomers being the most pessimistic after a 26 point swing to minus 9, followed by Gen Z and millennials, who remained basically neutral. Among the top bought stocks for boomers were Shopify, Tesla, and Suncor. And finally, when we break things out by province, overall sentiment in Ontario was the most pessimistic, while all other provinces were relatively neutral.
And that's a roundup of what happened with the DII for April Site Index Close.