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As Dow nears all-time high, retail investors bullish, brokerage says

March 04, 2013|By Andrew Tangel
  • A trader works on the floor of the New York Stock Exchange.
A trader works on the floor of the New York Stock Exchange. (Andrew Gombert / EPA )

NEW YORK -- Bullish retail investors are helping push stocks near all-time highs, according to retail brokerage TD Ameritrade.

Retail investors have steadily been increasing their exposure to the stock market over the last seven months, said Steve Quirk, senior vice president of TD Ameritrade's Trader Group.

Investors seemed to have shrugged off the looming spending cuts because of U.S. budget "sequestration" and the recent Italian election that threatened to rekindle European instability as the continent tries to overcome its debt crisis and recession.

“They are not deterred,” Quirk said.

TD’s Investor Movement Index rose to a bullish 5.14 in February, up from 4.71 in January and the highest reading since June 2011.

TD Ameritrade’s analysis of its customer accounts shows retail investors have been repositioning their portfolios, buying under-valued stocks while selling those that have rallied.

“They’re still increasing their overall exposure,” Quirk said. “They’re still bullish on the market.”

The Dow Jones industrial average closed Monday within striking distance of its all-time high of 14,164.53 reached on Oct. 9, 2007.

After opening lower Monday, the Dow rose 38.16 points, or 0.27%, to 14,127.82.

To be sure, many individual investors remain wary of investing in the stock market ever since they saw their retirement savings plunge in value amid the 2008 financial crisis.

The stock market has since rallied as the Federal Reserve has pumped billions of dollars into the economy, making other investments less attractive.

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