TD's new DIY sentiment index shows energy tops material sector

Younger investors take more innovation risks while boomers preserve wealth, says TD Direct Investing VP

TD's new DIY sentiment index shows energy tops material sector

TD Direct Investing has launched a monthly investor sentiment index that provides its do-it-yourself (DIY) investors with a picture of the landscape they’re working in, and it’s picking up some interesting demographic differences.

“This is just another tool in the arsenal that we’re making available to the users of our direct investing platform,” Ted Paris, Vice-President of Direct Investing, Acquisition, Engagement and Segmentation for TD Direct Investing, told Wealth Professional of the new index that it launched this fall.

“But this tool is somewhat unique as it’s different from other sentiment indexes. It provides the self-directed investors and do-it-yourself client with a bit more of an understanding about the investment landscape to inform them and help them understand what’s happening and then make their decision about their investment choices.”

Paris noted that TD has the dominant share of the overall DIY market, and its new tool offers investors – many of whom are new and youngers investors who have more recently come into the marketplace – a quick scan of what’s been happening as they continue to make their decisions.

What’s been showing up since the tool was launched is that the older investors are more conservative with a focus on wealth preservation, while the younger generations are ready to task risks on innovation.

Overall, though, the energy sentiment continues to lead confidence in all sectors, with the boomers and traditional generations choosing companies such as Suncor Energy and Enbridge, while the next-generation investors are choosing more of the renewable energy options.

The material sector has also been the second most popular, with industrial and precious metal companies seeing the strongest demand through companies such as Barrick Bold and Lithium Americas Corp.

As for companies positioned for the future, the Gen Z, millennial, and Gen X investors have been choosing sectors such as Tesla, Facebook/Meta Platforms Inc., and Shopify.

Paris said TD doesn’t use any of the data to change what it offers, but is noting how the investors are navigating in the market, which is significant, considering its share of the DIY market.

“It’s all about creating a space for somebody to come in and make decisions on their own,” he said, noting the tool provides data on what’s actually happening versus what people say they are doing, as other sentiment indexes do.

“It’s not intended to predict what’s happening going forward, it just speaks to how people have behaved historically. So, people can use that context to confirm their own decisions,” he said. “We think it’s a unique contribution to the space for investors today.”