Retail investors continue to buy lower despite turmoil: TD Ameritrade

Retail investors have continued to buy the dip in the recent market turmoil, even loving tech despite the sector’s rout, according to AJ Kahling of brokerage TD Ameritrade.

“Our Indicators, TD Ameritrade [Investor Movement Index]just came out this morning, in effect indicating that retail traders are continuing to buy the dip,” Kahling, the firm’s head of international education, told CNBC’s “Squawk Box Asia” on Wednesday. TD Ameritrade claims that its Investor Movement Index is the “first index based on actual investment behavior.”

“One of the interesting things we saw was that technology continued to be a big buy,” he said.

I think what customers were doing was saying “listen, this inventory is almost on sale”.

AJ Kahling

Head of International Education, TD Ameritrade

The world’s biggest tech companies recently lost more than $1 trillion in three trading sessions.

As of Wednesday’s close, the tech-heavy Nasdaq Composite on Wall Street has fallen more than 27% so far this year.

Even bigger losses were seen in Asia, where the Hang Seng Tech index in Hong Kong fell more than 29%. On the mainland, the Star 50 Index – a collection of the 50 largest tech-heavy Star Market stocks – fell more than 28% in the same period.

Investors appear to have interpreted the tech pullback as a buying opportunity, according to Kahling.

“It looks like these stocks are … an opportunity to buy them that they haven’t been in two years. If you missed the Covid-era pullback when we had the 23 days … of declines there, this could be your opportunity,” he said.

Much of the buying took place toward the end of April rather than the beginning, Kahling said.

“What we think we’ve seen happen is that people are waiting for, you know, a level of support, a level of tech support to hit before they jump in and buy that dip,” he said. added.

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Some of the names bought by TD Ameritrade customers include chipmaker, heavyweight Taiwan Semiconductor Manufacturing Company and US software company Adobe.

“I think what customers were doing was saying ‘listen, these stocks are almost for sale,'” Kahling said, adding that TSMC shares had fallen to levels not seen since October 2020.

“It was specific to Singaporean TD Ameritrade customers, but the whole customer base in the US, including Singapore, also bought technology – Twitter, NVIDIA, AMD,” he said. “There is still a lot of technology buying among the TD Ameritrade Singapore and the general population.”

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