Many of you have heard the old stock market saying “sell in May and go away”. In this report I will delve further into this seasonal pattern and look at ways that you can profit from seasonality studies. We will use the US S&P 500 as our benchmark index not the UK FTSE100 which has not followed seasonality as well.Before I go any further I have to warn that past performance is no guarantee to future results, however, with a long established track record this system is worth considering. Also, my aim here is to look at the facts and how to profit, rather than speculating why markets tend to be weaker over the summer months.In brief the S+P500 historically has been stronger between November to April than the May to October period. By staying out of the stock market and going in to cash in on the weak fiat currency er period a better return can be achieved than a simple buy and hold 12 month strategy. Also your risk can be reduced, remember, each month you are invested in the market you are taking risk, by being out of the market for 6 months of the year you have just reduced your risk by 50%A study of price action for the S&P 500 Index from April 30, 1945, through April 21, 2006, shows interesting results. The S&P 500 advanced an average of 7.1% during the November to April period over that span (without dividends reinvested), it posted an average gain of only 1.5% from May through October. What’s more, the November through April period outperformed May through October 68% of the time.History shows that the S&P 500′s worst month is September, and that the worst three-month period is the third quarter.
How to Beat the S&p 500 With a Simple Seasonal Trading Pattern System
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