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Wall Street History
https://www.gofundme.com/s3h2w8
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11/05/2004
Seasonality
Back in 1986, Yale Hirsch, now Editor at Large of “Stock Trader’s Almanac,” discovered one of the most powerful principles of investing, that being if you invest only during the November 1 – April 30 time period you will have far more success than investing in the corresponding period, May 1 – October 31. And it’s not even close.
For example:
If you invested $10,000 in the Dow Jones Industrial Average on May 1, 1950 and took it out each October 31, repeating this exercise through 2003, your portfolio after 54 years would have actually shrunk $318 to $9,682. [Not including dividends.]
But, if you took $10,000 and invested it only during November 1 – April 30, your portfolio would have grown $482,060.
*For the S&P 500 the results are $349,165 and $7,102.
The key is the power of compounding, as well as the fact that the four top months since 1950 for both the Dow and the S&P are November, December, January, and April, all within the 11/1- 4/30 timeframe. [For the S&P it’s five months, including March.]
Monthly returns for the Dow Jones January 1950 – June 2004
November ..1.6% avg. percentage change December ..1.8% January ..1.4% February 0.2% March 1.0% April ..1.9%
May 0.1% June ......-0.1% July 1.1% August ..-0.1% September....-1.1% October .....0.6%
Returns for the S&P 500 January 1950 – June 2004
November.....1.7% December .1.7% January .1.5% February ..-0.1% March ...1.0% April .1.3%
May ..0.3% June ..0.2% July ...0.9% August ..0.02% September...-0.7% October ....0.9%
Nasdaq January 1971 – June 2004
November ..1.9% December ...2.1% January ...3.9% February .0.6% March .0.3% April ...1.2%
May 1.0% June 1.3% July ...-0.2% August 0.3% September .-1.1% October ..0.5%
Source: “Stock Trader’s Almanac 2005”
Brian Trumbore
Wall Street History will return November 12.
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