September is the weakest month on the Australian sharemarket calendar – and also typically kicks off a 12-week period of extreme volatility that has seen some of the biggest swings in local stock prices over the last four decades. This article looks at seasonal analysis over 30, 20, 10 and 5-years, and then we’ll test […]
The September Effect Read More »
Seasonality studies show that in any decade, years ending with a 5 have tended to be favorable for stocks Lets test this theory: For testing Year 5 stock market performance, we will use month-end price data for: Year 5 occurs every ten years starting in 1905 (1905, 1915, 1925, 1935, etc.). Year 5 showed a
What do years that end in a 5 mean for stocks Read More »
Most investors either explicitly or implicitly understand the importance of risk-adjusted returns. This is shown by the fact that investors typically diversify to shield their portfolios from uncompensated risk. If risk was not an important consideration in portfolio construction, allocating all assets to a single security with the highest expected return would be quite common.
risk-adjusted returns – why you should take note of this before you invest Read More »
Did you know there are seasonal patterns in the stock market? February has historically been a flat to slightly positive month for major stock indices. The indices rise in February only abut 50% of the time, for a marginally positive average gain. January just finished with the S&P 500 up just over 2% and the
The best & worst months for the stock market Read More »
Over the past 200 years, western economies have recorded an economic cycle that averages 18.6 years (The shortest on record is 17 years, with the longest being 21 years). Today we explore this cycle and its impact on land, stocks and gold prices – looking at where we currently sit – to help forecast what
The 18.6-Year Economic Cycle – What it Means for Land, Stocks and Gold Prices Read More »
Introduction One may have seen the following graphic from an Ohioan farmer, Samuel Benner. It was originally published in 1884 where he predicted the volatility of future markets from 1924 to 2059. There is a more extensive chart if one is willing to look that uses back tested data. It is a bit tough to
Investing with the Benner Cycle Read More »
The Presidential Cycle is a four-year cycle where the US Stock Market seems to make similar returns in each of the four years. I.e. We compare all the years of the election (2020, 2016, 2012…) and the results seem to align. The most common theory behind the cycle is that there is more spending in
Presidential Cycles and the Markets Read More »
There is an “unconventional” index that economists and investors use to predict economic downturns. It’s called the Skyscraper Index. Invented by Andrew Lawrence, a property analyst at Dresdner Kleinwort Wasserstein, the index was based on a relatively simple idea – that the completion of the world’s tallest building is inevitably a marker for the start
The skyscraper index – predictor of market tops? Read More »
Today’s stock market is nothing short of unusual. The S&P 500 has climbed over 24% to date against a backdrop of strong economic growth and rising interest rates. Despite these factors, the unemployment rate has remained low at 3.7% as of November, and inflation has moderated. To give some context on the current stock market cycle, this
What the last 60 Years of Investing looks like Read More »
Shareholder return is the holy metric by which all equities are compared, but what factors actually influence the returns shareholders get from their equity holdings? In October 2023, Morgan Stanley’s Michael J. Mauboussin and Dan Callahan put out a paper that offers a framework of the key components that drive shareholder returns. To clearly show
What fundamentals ultimately drive share prices? Read More »
