logo
  Join        Login             Stock Quote

The Most Wonderful Time of the Year…For Stocks

 November 21, 2012 11:42 AM
 


(By Frank Holmes) November hasn't been living up to its reputation as one of the best months for U.S. stocks. Equity investors have been fed a cornucopia of negative news that has been difficult to digest, including the outcome of the "fiscal cliff," the front page photos of rioting in the eurozone, and the escalation of geopolitical risk in the Middle East.

As important as it is to stay informed on global events, don't let short-term events affect your long-term investments. It may be more profitable to let seasonal trends guide your decision making. Take a look at the bar chart below, which shows three-month rolling returns for the S&P 500 Index during the past eight decades.

Going back to 1928, the best three-month time period to invest in the U.S. stock market has been November through January. On average, stocks have climbed 3.34 percent during this period. The December through February timeframe has also been a historical gain for stocks, averaging 2.49 percent.

[Related -Why Growth Is Deep In The Heart Of Texas]

Some market experts chalk it up to the Santa Claus rally in which investors tend to make adjustments for tax purposes or put their year-end bonuses to work in the market. There's also the January Effect, when small-capitalization stocks outperform their larger counterparts.

[Related -Managing Volatility and Loving It]

In addition to these historical trends, there are plenty of positive reasons to be bullish on stocks this year. Alexander Green, Investment U chief investment strategist, lists 10, including the accommodative policies of the Federal Reserve, low interest rates making stocks attractive relative to cash, little inflation, stabilization of housing prices and the S&P's compelling price-to-earnings of 12 times.

Regardless the investment reason, for stocks, it appears that now may be the most wonderful time of the year.

The S&P 500 Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageADP: US February Payrolls Continue To Grow, But At Slower Rate

Payrolls at US companies posted another respectable gain in February, advancing 212,000 over the previous read on...

article imageAre You Prepared For Negative Interest Rates?

Last Tuesday, all eyes were on Federal Reserve Chief Janet Yellen. In prepared testimony, she offered a few read on...

article imageGreek Problems Born from Socialism

Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global read on...

article imageThe Eurozone: On The Road To Recovery With A Lingering Risk

Back in September the idea that the Eurozone's economy could potentially undergo a recovery (see post) was read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Three Events Worth Watching
More Articles on: Finance , Basic Materials



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.