RunTheNumbers
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An interesting article on seasonal investing, using in this instance the DJ industrial average.
http://www.optionetics.com/articles/article_archive_full.asp?idNo=14634&intChoice=19&mType=&mSearch=
"...for each calendar year since 1970, I assumed that a long position in the Dow would be held during all of the dates in each the patterns shown above. On all other dates we would be in cash and earning a nominal rate of interest (1% per year)."
"...From 12/31/69 the seasonal system grew from $1,000 to $31,481. The buy-and-hold approach grew to just $13,894.
...The Dow suffered a maximum drawdown of –45% (during the 1973-74 bear market) and three other declines in excess –30%, the seasonal system never experienced a drawdown of more than –11.2%.
...All told, the seasonal system was only in the market about 24% of the time."
A quick calculation suggests a compound growth rate of 34.4% per annum.
It makes one wonder what its really all about!
Regards
Ben
http://www.optionetics.com/articles/article_archive_full.asp?idNo=14634&intChoice=19&mType=&mSearch=
"...for each calendar year since 1970, I assumed that a long position in the Dow would be held during all of the dates in each the patterns shown above. On all other dates we would be in cash and earning a nominal rate of interest (1% per year)."
"...From 12/31/69 the seasonal system grew from $1,000 to $31,481. The buy-and-hold approach grew to just $13,894.
...The Dow suffered a maximum drawdown of –45% (during the 1973-74 bear market) and three other declines in excess –30%, the seasonal system never experienced a drawdown of more than –11.2%.
...All told, the seasonal system was only in the market about 24% of the time."
A quick calculation suggests a compound growth rate of 34.4% per annum.
It makes one wonder what its really all about!
Regards
Ben
