Radio Rallies & Reversals
As 2010 comes to a close, here are some seasonal strategies to consider to start the new year:
One seasonal anomaly is that small cap stocks tend to outperform large cap stocks from roughly mid December through the beginning of March. The same could be said for both retail and materials stocks; and what about January being a predictor of the rest of the year? Investors and money managers are setting up their expectations for the rest of the year. If they are expecting a good year, they are more inclined to move more money into the market in January, boosting the performance of January and the rest of the year. From 1950 to 2007, January has predicted the rest of the year for the S&P500 with an accuracy rate of 74%.
GB
One seasonal anomaly is that small cap stocks tend to outperform large cap stocks from roughly mid December through the beginning of March. The same could be said for both retail and materials stocks; and what about January being a predictor of the rest of the year? Investors and money managers are setting up their expectations for the rest of the year. If they are expecting a good year, they are more inclined to move more money into the market in January, boosting the performance of January and the rest of the year. From 1950 to 2007, January has predicted the rest of the year for the S&P500 with an accuracy rate of 74%.
GB
posted by Gordon Bell at
7:03 AM
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