Signs are piling up that individual investors are getting back into the stock market.  After a nearly 20% rise off of the September bottom it seems like individual investors are beginning to feel it once again.  Volume is rising at the options exchanges.  Brokers with a sizable retail presence like Interactive Brokers are seeing jumps in trading.  In surveys individual investors are saying that are moving money out of cash and into stocks.  One should keep in mind that of late investor sentiment has been particularly volatile of late and can therefore turn on a dime.

There two schools of though on the participation of individual investors.  The first says you cannot have a true bull market without individual investors.  The second camp says that once individuals buy into a rally, it is likely over.  What is interesting is that individuals, despite having drawn down cash are still not holding equities in the amounts seen over the past decade.  Given the past few years, they may not rebound to those levels, but it is interesting to note nevertheless.  In today’s screencast we look at the state of individual investor sentiment.

Items mentioned in the above screencast:

Individuals are trading options again.  (WSJ)

Interactive Brokers (IBKR) sees a surge in trading volume.  (Barron’s)

Individual investors are shifting out of stocks into cash.  (Pragmatic Capitalism)

Investor sentiment is becoming increasingly bullish.  (AAII)

Investor sentiment has been particularly volatile of late.  (Phil Pearlman)

Daliy chart of Interactive Brokers and E*Trade (ETFC).  (Finviz, ibid)