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What is the TD Direct Investing Index (DII)?
The TD Direct Investing Index provides data and insights relating to historical self-directed investor activity.
The webpage is updated mid-month with a information from the previous month, and includes several interactive filters that allow the site visitor to refine their criteria.
For each month they will see:
- the monthly sentiment score
- an editorial video discussing the score
- a one-page summary discussing the DII information from the previous month
- filters which enable site visitors to look at activity (the most popular securities bought, sold, and held) by investor age, province (region), trading segment, and trading style.
What is the monthly sentiment score?
A number on a scale from -100 to +100:
- Very Bearish (-56 to -100)
- Bearish (-4 to -55)
- Neutral (-5 to +4)
- Bullish (+5 to +54)
- Very Bullish (+55 to +100)
The score is a result of these four investing behaviour measures (also called proxies), as defined by TD that were developed as part of the DII:
- Bought vs Sold
Measures net equity demand—whether self-directed investors were buying more or selling more in a specified month. If positive, they bought more than they sold. If negative, they bought less than they sold.
- Chasing Trends
Measures if self-directed investors bought securities on a rising or declining market. If positive, it indicates self-directed investors bought when share prices were increasing. If negative, self-directed investors bought when share prices were decreasing.
- Bought at Extremes
Measures if self-directed investors were buying at either the top or bottom of the market. If positive, self-directed investors bought on a rolling 52-week high price. If negative, self-directed investors bought in a market dip. (A rolling 52-week high or low means the highest and lowest price the security traded at during a one-year period back from today. The lowest price is often referred to as a market dip.)
- Flight to Safety
Measures how much self-directed investors were pulling back into safer, less risky investments. If positive, self-directed investors traded in lower risk items such as cash, bonds, fixed income, and Money Markets. If negative, self-directed investors traded in higher risk items such as equities.
- Watch this video which explains how the DII is calculated.
What is on the DII web page?
The page has six parts:
- Dropdown menu where you select the month you are interested in seeing. When you make a selection, the monthly sentiment score and scores for each behavioural measure are displayed.
- Historic range graph – you can select 13 months or 2 years to see how the sentiment score changed over time.
- Editorial video – you can watch a video which talks about that month's sentiment.
- Insights document – You can read a summary discussing the DII information from the previous month
- Most popular securities (self-directed investors) – this table allows you to see the most popular 10 securities that were bought, sold, or held in the month you selected from the dropdown menu at the top of the page along with the filters you selected. If you didn't select any filters, the default filter of "all" is displayed. To choose a filter, click on the filter icon to display all 4 filters: age, region, trading style, and sectors. The default setting is "all" for each filter. You may make a selection in 3 of the 4 filters then scroll down to press the GO button. The remaining filter defaults to "all". Please note that you can change your filter selections at any time by pressing the reset button. The filters you select apply to all tabs (bought, sold, and held) until you change the filters.
You'll also see how those securities trended from the previous month
- Last month's trends (self-directed investors) – this table allows you to see the securities that trended by asset allocation and sector based on the filters you selected. Start by selecting the tab: asset allocation or sector. To choose a filter, select the filter icon to display the three filters: age, regions, and trading style. You may select from each of the 3 filters. The default setting is "all" for each filter.
Scroll down to the Go button to display your results in a bar graph with the % and change over the prior month. You can change your filter selections at any time by pressing the reset button.
Note if there is not sufficient data based on your filter selections, a message displays on the page.
What are the filters?
There are four filters with the following selections:
- Gen Z and Millennials (born 1981 and after)
- Gen X (born 1965 - 1980)
- Baby Boomers (born 1946 - 1964)
- Traditionalists (born 1928 - 1945)
- British Columbia
- Atlantic provinces (Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland/Labrador)
- Manitoba and Saskatchewan
- Trading Style
- Long-term investors (up to 29 trades in 3 months)
- Active traders (30+ trades in 3 months)
- Sector: The Global Industry Classification Standard (GICS) was developed in 19991 for the global financial community for consistent reporting. There are 11 sectors.
- Communications services
- Consumer discretionary
- Consumer staples
- Information Technology
- Real estate
What is asset allocation?
There are 8 asset classes in the DII:
- Cash & cash equivalents
- Canadian equities
- U.S. equities
- Canadian fixed income equities
- Global fixed income
Asset Allocation refers to the classification of investments inside a portfolio. The three basic Asset Classes are Equities, Fixed Income, and Cash and Cash Equivalents:
- Equities are any common share of stocks that are publicly traded on a securities market such as the New York Stock Exchange (NYSE), the Toronto Stock Exchange (TSX), or the TSX Venture Exchange (TSXV). Equities may be held directly by you through shares held in an account, or indirectly by you, through holdings of mutual funds and exchange-traded funds (ETFs) that hold equities. Historically, relative to fixed income, equities have exhibited both higher volatility.
- Fixed income refers to any security under which the borrower or issuer is legally obligated to make payments of a fixed or variable amount. These include securities such as bonds, term deposits, and treasury bills. Preferred shares are included in this category because their value is strongly influenced by interest rates, much like fixed income securities. Historically, relative to equities, fixed income securities have exhibited lower volatility.
- Cash and Cash Equivalents refer to any actual cash or securities that behave like cash. These include securities such as Money Market Funds, GICs with a maturity of less than 1 year, and cash balances. Historically, relative to equities and fixed income, Cash and Cash Equivalents have exhibited lower volatility.
Asset Classes - The 3 basic asset classes are further divided into 6 asset categories to reflect the geographic region of the investments: 1) Cash; 2) Canadian Fixed Income; 3) Global Fixed Income; 4) Canadian Equities; 5) U.S. Equities; and 6) International Equities. “International” refers to any geographic region outside of Canada and the United States, while "Global" refers to any geographic region outside of Canada.
Other includes many non-traditional investments including:
- Options and other Derivatives
- Physical Commodities
- Segregated funds
- Leveraged Investments
- Hedge Funds
- Structured Products
Other also includes mutual funds or ETFs that cannot be classified in just one of the other classes such as a balanced mutual fund, or a target date fund.
Unclassified assets are typically new issues (IPOs) that have not yet been classified.
The information contained herein has been provided by TD Direct Investing and is for information purposes only. The information has been drawn from sources believed to be reliable. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.
The TD Direct Investing Index (DII) provides data and insights relating to historical self-directed investor activity. The DII is for informational purposes only. Any information provided through the DII should not be considered an investment recommendation, nor is it an offer, or solicitation of an offer to purchase or sell any investment fund, security or other product. Particular investment, trading, or tax strategies should be evaluated relative to each individual’s objectives. Investors should not take the historical information as an indication, assurance, estimate or forecast of future values or future performance. The DII should not be used as individual financial, legal, investment or tax advice. Please consult your own legal, investment and/or tax advisor. Information provided through the DII is subject to change without notice.
The Toronto-Dominion Bank and/or its subsidiaries or affiliated persons or companies may hold a position in the securities mentioned, including options, futures and other derivative instruments thereon, and may, as principal or agent, buy or sell such securities. They may also make a market in, issue, and participate in an underwriting of such securities.
A high degree of risk may be involved in the purchase and sale of options and may not be suitable for every investor. The risk of loss in trading securities, options and futures can be substantial. Investors must consider all relevant risk factors, including their own financial situation before trading. A higher level of market knowledge, risk tolerance and net worth is required.
TD Direct Investing is a division of TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank.
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1 The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. (“S&P Global Market S&P GICS Distribution Agreement Intelligence”). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by The Toronto-Dominion Bank.
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