TD Ameritrade: Retail Investors Better Off Today Than they’ve Ever Been

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TD Ameritrade: Retail Investors Better Off Today Than they’ve Ever Been

TD Ameritrade Holding Corp. (NYSE:AMTD) President and CEO Fred Tomczyk spoke with FOX Business Network’s Maria Bartiromo about retail investors. Tomczyk said, “the retail investor is better off today than they’ve ever been in history.” Tomczyk also commented on the asset-based source business saying, “That business is up nicely. They’re at record levels right now.” Tomczyk went on to say, “People are increasingly using margins, which is another sign of them being increasingly bullish and I think what we may see here is a bit of a softening in April.”

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TD Ameritrade CEO on the retail investor:

“Well, the retail investor is definitely back, our trades in the first quarter, the March quarter, were up 30 percent year-over-year. Margin loans are at record levels. We measure something called the investor movement index, which measures not what they say they are going to do but what they actually do.  And they’re more bullish now than at any time since we started measuring.”

TD Ameritrade CEO on whether the retail investor is back:

“Absolutely. They have been coming in increasingly over the last nine months.”

TD Ameritrade CEO on whether the flows in retail buying are positive:

“The flows are all positive.  I mean, it’s been predominantly in equity and balance funds, but even in the last little while here, we started to see increased flows into bond funds, which is the first time in quite a while.”

TD Ameritrade CEO on high frequencies traders and retail investors:

“Well, I think there is — I’ll give you two perspectives.  I think for the retail investor, everybody on the panel I was on yesterday, would acknowledge that the retail investor is better off today than they’ve ever been in history.  They are getting lower trading commissions.  They’re getting lower bid ask spreads.  They’re getting quicker execution.  There is a lot of liquidity in the market.”

TD Ameritrade CEO on the asset-based source business:

“That business is up nicely.  They’re at record levels right now.  People are increasingly using margins, which is another sign of them being increasingly bullish and I think what we may see here is a bit of a softening in April.  But then we’ll see where it happens; it’ll go wherever the economy goes.  And the softening in April is really some of the more popular stocks in our client base, which will be social media and technology driven stocks.  I’ve seen a bit of a mini-correction.”

TD Ameritrade CEO on being backed by TD Ameritrade:

“It allow us to run a different model because we see most of our client cash into an FDIC insured deposit account with TD Ameritrade Holding Corp. (NYSE:AMTD), who’s one of the largest and most successful banks in the world.  And that gives us increased comfort and security.  It also allows us to run a model basically where we do not have to put up a lot of capital.  So we’re basically a true agency broker.  And all of our earnings are essentially free cash flow.  So you can see us return a lot of investors’ capital back to them.”

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