Seasonality seems to be a hot topic to talk about in the investment media. Retail investors like to hear about relationships between months, seasons, political events, superbowls, and the ever enigmatic return of the stocks market. I have looked at the seasonality of volatility by month and the seasonality of returns by month, so why not hope for a santa claus rally?
Looking at S&P 500 returns since January 1928, we found that December was one of the four months that experienced average returns of greater than 1% (January, April, July, December) with an average return of 1.5%. If we just look at December returns following negative returns in November, this average goes up to +1.8%:
December Returns after Negative Novembers are primarily positive
The other difference is that the percentage of winning December returns goes up to 80% from 74.7% when following a negative November return. To put this into perspective, the percentage of positive months since 1928 has been about 58% of the time or about 7 months out of the average year. As of today, we are up .81% in December 2011. This is not a very scientific study, but it gives the bulls some hope to latch on to for the remainder of the year.
Seasonal Stock Market Trends: The Definitive Guide to Calendar-Based Stock Market Trading (Wiley Trading)
There is a seasonal bias to the stock market, and by paying attention to the seasonal market tendencies you can gain an edge in the stock market over the long haul. Seasonality offers a practical approach to investing and trading. What better way to learn how to employ seasonal systems than learning from Jay Kaeppel, a master in the analysis of seasonal trends? Kaeppel walks you through this phenomenon that continues to work consistently, providing you with his ultimate seasonal index to make the calendar work for you. Stock Market Seasonals provides a never-before-seen definitive guide that illustrates how to utilize a combination of four basic seasonal tendencies in order to maximize returns.There is a seasonal bias to the stock market, and by paying attention to the seasonal market tendencies you can gain an edge in the stock market over the long haul. Seasonality offers a practical approach to investing and trading. What better way to learn how to employ seasonal systems than learning from Jay Kaeppel, a master in the analysis of seasonal trends? Kaeppel walks you through this phenomenon that continues to work consistently, providing you with his ultimate seasonal index to make the calendar work for you. Stock Market Seasonals provides a never-before-seen definitive guide that illustrates how to utilize a combination of four basic seasonal tendencies in order to maximize returns.
