Thanks for your kind words
I think my point is that you post an excerpt that merely represents “confirmation bias”. That is, your author says that the “market goes up 58% of the time” in the summer so if you sell you have your head up your rectum.
I am merely pointing out that this statement is nonsense and not supported by any factual representations.
For example, what if the 58% of the time, the market is up, it is only up an average of 2%, but the 42% downtimes, it is down 15%. His statistical commentary is, as a standalone, worthless information. Worse yet, it comes with a negative connotations of rectums, etc…classic confirmation bias.
So I post an actual study that proves that there is a summer affect across ALL country’s stock markets and…you can see their methodology and critique it (unlike your confirmation guy). Makes for a better conversation than rectums doesn’t it?
But keep in mind that this isn’t the only study. The more famous one is perhaps Bouman and Jacobsen (2002) that showed the same findings.
Or how about other independent research as Forbes reports:
Jeff Hirsch at the Stock Trader’s Almanac calculates that the Dow Jones industrial average has an average return of just 0.3% during the worst six-month period (May through October) since 1950. Conversely, during the best six months (November through April), the Dow has an average gain of 7.5%.
Sam Stovall at S&P Capital IQ says the S&P 500 has risen by a mere 1.2% during the average worst six-month period, while rising 6.9% during the average best six-month period. (Sam’s numbers go back to 1945.)
Now going back again to the study I referenced, they proved that:
The average 6-month winter returns (November through April) are 6.93%, compared to the summer returns (May through October) of 2.41%. The overall Halloween effect that measures the difference between winter and summer returns is 4.52%, with a t-value of 9.69.
As regards your supposition that this 5 year interval creates some anomaly in the data, that is NOT supported by the data and for reasons that should be obvious. If one uses a one year buy and hold vs. sell in May…that one year could be a statistical anomaly. But everything over a one year buy and hold proved a May Affect as the unusual year was diluted out.
And before you suggest it, I acknowledge that the May affect may be nothing more than an illusion related to the winter months being so good in comparison.
So you can take it or leave it…doesn’t matter to me. But let’s try to be as objective as we can about the truth and not minimize thoughts and data by bringing up rectums. Maybe you could reference the actual data that your guy is pulling his numbers from so we could examine it?
Because otherwise, I have provided you with 4 studies that are consistent with the contention that a May affect exists across all stock markets…the proviso of course being that past performance does not guarantee future results
The beauty of the market is that we don’t all have to agree. In fact, it is paramount that we don’t, otherwise everyone sells in May and the market crashes every single time.