Investors at brokerage Charles Schwab increased their equities holdings in December, and it seems they can't enough of Nvidia stock. The tech titan was their top pick for the month, and other familiar tech names were popular as well.
Some investors rotated out of the year's outperformers in information technology and communication services. Many moved to underperformers in health care and energy during the four weeks ended Dec. 27.
But along with Nvidia, the top stocks for investors during the last month of 2024 were techs. They included Tesla, Palantir, Amazon and bitcoin holder MicroStrategy.
Schwab investors also sold a lot of tech stocks, however. The top sells for the month were Apple, Broadcom, AT&T, Microsoft and Disney.
According to Joe Mazolla, head strategist for Trading and Derivatives, investors were bullish despite a challenging month and a failed Santa Claus rally.
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"Schwab clients increased their exposure to equities in December, even as major indices experienced atypical swings and turbulence," Mazolla said in a Schwab press release. "We didn't see a significant 'Santa Claus rally' this year, but investor sentiment appeared bullish, particularly at the start and end of the month."
Nvidia Stock: In Top Five For 2024
The full year, however, offers a different perspective among Schwab clients. Two of the companies traded places on the buys and sells lists when all of 2024 is taken into account.
Nvidia stayed on the top five buy list for the full 12 months among Schwab clients, along with Palantir and Amazon. Advanced Micro Devices also made the top five. But Microsoft — a top sell during the month of December — nevertheless was a top buy for the full year.
The top sells among Schwab clients during 2024 included Apple and Disney, as well as Bank of America and PayPal. But top December buy Tesla also made the top sells list for the full year.
During 2024, the Schwab Trading Activity Index showed that investors held on to their exposure levels as the major indexes hit record highs several times.
The Schwab Trading Activity Index increased to 51.16 from 46.22 in November. Also known as STAX, the proprietary index analyzes trading activity and investors' holdings in the millions of trading accounts held with Schwab by pulling out sample accounts and calculating individual scores and finally using the median score value.
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What IBD Found In December
Investor's Business Daily tracked December's ups and downs closely through its recommended exposure levels.
The postelection rally of November hit a roadblock when the Fed said it would limit rate cuts this year. That sparked a sell-off on Dec. 18 as the 10-year Treasury note yield surged. It prompted IBD to reduce its recommended exposure level to a range of 60% to 80%, down from a range of 80% to 100%. The recommended exposure has changed since then.
Meanwhile, the Cboe Volatility Index, or VIX, soared. A contrarian indicator also known as the fear gauge, the VIX often suggests that markets are bottoming when the index peaks.
Sure enough, the major indexes rallied headed into the holiday period with IBD's equity exposure recommendation going to maximum. That got a sharp trim, however, when the year-end Santa Claus rally fizzled.
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