When it comes to investing in the stock market, experts almost universally advise the average investor to avoid the temptation of timing the market.
The vagaries of world events, incoming economic data, and the natural ebbs and flow of the markets often confound experts, let alone average investors who simply want a reasonable return on their hard-earned cash that’s available for investing.
Over just the last few years, unexpected turns such as the COVID-19 pandemic, the Russian military action in Ukraine, supply chain breakdowns, tightening energy markets, and a recent persistent jump in inflation has caused turmoil in the public markets.
And you thought NY sports betting was tough.
From March 2020 through January 2022, the S&P 500 and other equity indexes defied economic gravity as the S&P 500 plunged as deep as the low 2,300s on panic over COVID, then soared to above 4,700 early this year. Then, as global economic stressors made their weight felt, the market indexes went on a slide, giving up some of those gains.
Can Better Months to Invest Be Measured?
So, are there indicators that investors can lean on to help broadly with investment decisions – or, at the very least, is there some history that highlights trends that might, on average, suggest when indexes have climbed or fallen?
EmpireStakes.com utilized information developed by Schroders, a British asset management firm. The data acquired was from 31 years of performance across four major stock indexes, including FTSE 100, MSCI World, S&P 500 and Eurostoxx 50. The percentages in the table represent the historical frequency of indexes rising in a given month during that time. Data from the previous three years was left out due to the volatility of the market due to COVID-19.
Here is a chart that shows the months from best bet to worst, with corresponding odds.
Remember, sports betting has been legal for NY sports betting apps since the beginning of the year. These odds are just hypothetical and not for wagering in the state.
What the Schroders data shows might be good news, potentially, for investors who have been rattled by the downward turn of late in the U.S. stock markets.
For starters, the best month, percentage-wise, is still ahead – December.
The percentages are the historical frequency of the four indexes rising in a given month. And for December, the historical frequency is an investor-friendly 79%. If such a percentage were converted to a sports betting moneyline, 79% converts to -376.
December’s cheery outcomes have come to be known as the “Santa Claus Rally” and are so fondly regarded by investors that the phenomenon has its own Wikipedia entry.
Also ahead is the third-best month for historical frequency growth, October, when the percentage has been 68.8%. April has been the second-best-month at 74.3%.
History Says June Has Lagged Behind
At the other end of the historical spectrum is June, which has produced just a 36.7% track record for those four indexes rising. Other laggards are August, with just a 49.3% rate of indexes rising, and September at 51.6%.
The average frequency of growth over 12 months during the time period measured (1987-2018) has been 59.1%
When using historical data to judge the advisability of investments, the usual disclaimer should be kept in mind: Past performance is no guarantee of future returns.
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