{"id":81660,"date":"2015-11-30T08:13:13","date_gmt":"2015-11-30T13:13:13","guid":{"rendered":"http:\/\/countingpips.com\/?p=81660"},"modified":"2015-11-30T05:56:09","modified_gmt":"2015-11-30T10:56:09","slug":"sp-500-monthly-seasonality","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/11\/sp-500-monthly-seasonality\/","title":{"rendered":"S&P 500 Monthly Seasonality"},"content":{"rendered":"
November 30, 2015<\/div>
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By WallStreetDaily.com<\/u><\/a> \"Seasonality<\/p>\n

By Alan Gula<\/a>, Chief Income Analyst <\/em><\/p>\n

\u2018Tis the season for a stock market rally.<\/p>\n

December is the best month of the year for equities\u2026 and it begins tomorrow.<\/p>\n

Since 1990, the S&P 500\u2019s average price change for December has been +1.83%, which exceeds that of every other month, including October\u2019s 1.77% average gain.<\/p>\n

The stock market\u2019s positive end-of-year seasonality is shown in the chart below:<\/p>

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\"S&P<\/p>\n

As you can see, December also has both the highest minimum and the highest maximum gains since 1990.<\/p>\n

In December of 1991, the S&P 500 surged an incredible 11.2%, the best monthly advance over the past 25 years. The worst December for the S&P 500 during this timeframe was a 6% decline in 2002.<\/p>\n

Clearly, there\u2019s an edge to owning stocks in December.<\/p>\n

These data also further support the \u201cSell in May and go away<\/a>\u201d market adage, as the average returns for June, August, and September are all negative. August has been the worst month of the year on average, even if you exclude this past August\u2019s harrowing 6.3% decline.<\/p>\n

Cash in Your Chips?<\/h2>\n

In general, I think these seasonality patterns are extremely interesting \u2013 but they aren\u2019t particularly useful.<\/p>\n

Some traders may want to adjust their exposures based on the month of the year or even the day of the month. However, for most investors, holding a diversified portfolio of global stocks and bonds is the best way to take advantage of any stock market strength at the end of the year.<\/p>\n

This way we can rebalance our portfolios and reduce risk<\/a>, yet weather the bad months when seasonality fails us.<\/p>\n

It\u2019s also important to keep in mind that the prevailing market environment is far more important than seasonality factors.<\/p>\n

The worst months shown in red on the chart above were all associated with one of the following events: the Russian default of 1998, the collapse of the technology bubble, the credit crisis of 2007-09, and the European sovereign debt crisis.<\/p>\n

An assessment of the macro situation will always provide us with a more profitable course of action than seasonality.<\/p>\n

Now, we\u2019re not currently in a crisis, but we are<\/em> in the midst of a merger mania<\/a>, and credit conditions are tightening.<\/p>\n

Therefore, this December may prove to be an opportune time to raise cash, regardless of whether the month is positive for stocks.<\/p>\n

Safe (and high-yield) investing,<\/p>\n

Alan Gula, CFA<\/p>\n

The post S&P 500 Monthly Seasonality<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Alan Gula, Chief Income Analyst \u2018Tis the season for a stock market rally. December is the best month of the year for equities\u2026 and it begins tomorrow. Since 1990, the S&P 500\u2019s average price change for December has been +1.83%, which exceeds that of every other month, including October\u2019s 1.77% average gain. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-81660","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/81660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=81660"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/81660\/revisions"}],"predecessor-version":[{"id":81672,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/81660\/revisions\/81672"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=81660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=81660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=81660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}