TD Ameritrade's IMX Recap: The January Cause & Effect

TD Ameritrade released its January report on ts Investor Movement Index (IMX), which measures investor sentiment based on trends among TD Ameritrade's six million investor accounts.

The January Effect

The latest information from the report shows the index had a healthy increase in equity investments among retail traders, gaining 4.2 percent over December to hit 5.71. According to the report, IMX's performance has been on a five-month streak above the 5.4 mark.

Nevertheless, IMX is still below the recent two-year high point of 5.83, which the index hit last October. Even as Dow hit the 20,000 mark and most of the major indices are also setting records, investors were still reticent to join in the market enthusiasm.

The January Cause

TD Ameritrade speculates that part of this reluctance may be due to the Federal Reserve's decision to raise interest rates late in 2016, as well as the potential for further hikes in the near future. Another possibility could be the potential for decreased global demand for American goods based off of the recent strength of the dollar.

Those factors, combined with slight signs of volatility and investor uncertainty about what impact the new presidential administration's proposed policies will have on the economy, may have dampened some of the enthusiasm the markets reflected in January.

Check out TD Ameritrade's video below for more details on their January IMX Report.