Shift in Dividends?
Mtn_Stream
4/20/2011 9:58:54 PM
How about instead of going to cash in May, you transfer some money dedicated to growth stocks into big companies paying good yields? If you're already holding big company stocks paying good dividends, then why not add more to those positions in the summer if you can buy them lower?
Re: Re : The Market Follows a Pattern... Even This Year
Fred Goodman
4/20/2011 1:55:17 PM
I follow a compulsively large number of indicators daily and discuss them from time to time in my daily reports at www.marketmonograph.com
There is a lot of free material available on the site with detailed descriptions of many of the indicators posted here:
http://www.marketmonograph.com//a/goodman/keyIndicators/default.asp
However, I do anticipate covering them here occasionally when they are appropriate to a general discussion.
Re: Re : The Market Follows a Pattern... Even This Year
yalanand
4/20/2011 1:48:06 PM
Fred,
Thanks for you reply. What all technical indicators do you follow. I dont know much about technical indicators, do you intend to write article on technical indicators in your future blogs ? It would be great help to all of us.
Re: Re : The Market Follows a Pattern... Even This Year
Fred Goodman
4/20/2011 1:45:00 PM
For many years the market has outperformed between November 1 and May 31, so the short answer is that we should think about getting back in in November. However, the beauty of technical indicators is that they help us refine our entries and exits.
I would not use the calendar to decide, only to warn me to sharpen my focus on my indicators, and rather than moving fully to cash in May, I would simply sell my weakest holdings as they reach pre-determined stop losses or even better, price targets.
Re : The Market Follows a Pattern... Even This Year
yalanand
4/20/2011 1:15:24 PM
Fred,
Thanks for the excellent article. "Sell in May and go away" and when should investors return ? If there is correction now how long do you think investors should wait before re-entering the market ?
Re: What a difference a year makes...
TelecomFreq
4/20/2011 10:47:07 AM
Noreen, Great chart, that really helped to put the numbers in perspective for me. Being able to see it like that really makes the data pop out. It definitely is an interesting trend in the market.
Maybe this president is different?
tokyogai
4/20/2011 10:44:25 AM
The third year of a presidential term S&P numbers are impressive. Will it happen this time? Obama seems energized to have a budget fight and congress is not dominated by either party. Maybe this confluence of events will give us a result different from the historical one. Either way, the world's disasters and investor confidence ( along with the high price of oil ) seem to be holding things back. If we can get some of this behind us, third quarter may be a real barn burner for the markets. It would be nice to start to recover all the index losses in the financial crisis and to start to make new highs again.
Interesting post, Fred. I was trying to visualize the numbers, so I put together this quick chart. From 1965 through 2009, the compounded annual return to the S&P 500 has equaled 9.3%. However, in the third year of a president’s first term, which happened eight times during those years, the average annual total return to the S&P 500 has equaled 27.5%, with a range from 14.6% in 1971 to 37.6% in 1995.
In the three cases of a Democrat in the White House (Johnson 1967, Carter 1979, and Clinton 1995) the average gain for the third year was 28.9%. With Republicans in the White House (Nixon 1971, Ford 1975, Reagan 1983, George H.W. Bush 1991, and George W. Bush 2003) the average gain was 26.7%.
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