Saturday, October 30, 2010

Most Of Market's Gains Occur From November Through April

In general most of the gains on the S&P 500 Index ($SPX) occur in the period from November through April. This is one reason technical analyst indicate investors sell their equity holdings in May, i.e., "sell in May and go away until November." As Chart of the Day notes:
"...investing in the S&P 500 from the last trading day in October (therefore referred to as the Halloween indicator) through the end of April accounted for the vast majority of S&P 500 gains since 1950. While there are some noteworthy periods during which the Halloween indicator didn't produce (e.g. during the oil embargo of 1973-74, the dot-com bust of 2000-01, and the financial meltdown of 2007-2009), the overall out performance is compelling."
From The Blog of HORAN Capital Advisors

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