Article High Risk for US Markets at the Current Level?

T2W Bot

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Dec 19, 2004
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In my view, we are still in a secular bear market and at a point of high risk. However, we are now in the seasonally strong time for the year – a time when spirits are high and the market performs better than at any other time on a historic basis. A study in the December 2002 issue of the American Economic Review reported that the average stock market returns from Halloween through May Day (the so-called "winter" months) were significantly higher than equity returns from May Day through Halloween (the "summer months"). The findings were that the summer months’ returns have averaged so much less than those of the winter months that almost all of the stock market’s long-term returns have been produced during the winter months. The obvious implication is that simply going to cash between May Day and Halloween will have only minor impact on long-term returns while dramatically reducing risk.
I haven?t written a Special Alert in quite awhile and have been getting calls and e-mails...
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