The 11 million customers of discount broker TD Ameritrade accumulated in measured form common stocks, options and fixed income securities and ended 2017 with holdings in line with the gains of the Standard & Poor’s 500 stock index, according to charts Ameritrade provided to Forbes. The TD Ameritrade IMX index shows that the average transaction rate of 510,000 trades per day helped raise their customers’ net worth by a considerable amount. Assets held at TD Ameritrade increased 45% to $1.1 trillion over the past year.
This 2017 performance is a tribute to the Ameritrade television advertising campaign that features a modest couple with $103,000 in savings being wooed by an Ameritrade broker. In December alone Ameritrade clients were net buyers of Amazon (AMZN), Microsoft (MSFT), Bank of America (BAC), Nvidia (NVDA), Micron Technology (MU), Alibaba Group (BABA), and Tencent Holdings Ltd.(TCEHY), as well as General Electric (GE).. “Our clients now have more exposure to the S&P 500 index, and there is a lot of reason for optimism,” JJ Kinahan, Ameritrade chief market strategist said in a telephone interview. “As the S&P 500 gained strength during the year our clients’ exposure went up as well to record heights.”
The lesson to be learned was that global markets rose steadily in almost every month while volatility stayed at very low levels generating a rising curve of confidence in investing which turned out to be a benefit to the middle class investors TD Ameritrade and other discount brokers serve.
In turn they these clients during December were net sellers in Ford Motor (F), Kroger (KR), Wells Fargo (WFC), Valeant Pharmaceuticals (VRX), AT&T (T), Verizon Communications (VZ) Chipotle Mexican Grill (CMG), and Exxon Mobil (XOM).
Looking to the future a poll of fund managers by Bank of America Merrill Lynch shows an expectation that by the summer of 2018 the S&P 500 should be showing profit gains of about 12%. Some of the new record trading sessions on Wall Street in recent days reflect this optimism which is coming partly from the dramatic reduction in corporate taxes from the tax bill that just passed.
What’s more, a World Bank report on the global economy just made public shows a broad uptick unusual in economic growth around the world which can only be a positive backdrop for stock prices despite the levels they have achieved recently. “The year 2018 will likely mark a turning point for the global economy because, for the first time since 2008, the negative global output gap is expected to be closed, the Global Economic Prospects report stated. The World Bank forecasts economic growth to edge up to 3.1% in 2018 as the recovery in investment, manufacturing and trade continues. This progress, despite the waning of central bank stimulation of economies across the globe.
“Global growth is expected to be sustained over the next couple of years, and even accelerate somewhat in emerging market and developing economies thanks to a rebound in commodity exporters,” the World Bank report concludes.