My friend, we’ve just entered one of the best times to own stocks…
I’m talking about the second half of December (from the close of the market on December 15 to the December 31 close).
In the last quarter-century, stocks have gone down just four years in the second half of December.
Said another way, stocks have gone up 84% of the time in the second half of December.
[ad#Google Adsense 336×280-IA]The average return in the second half of December is 1.8% – a pretty incredible return really, when you realize we’re only talking about roughly two weeks of actual trading days.
Of the four losing years in the last 25, the biggest loss was 1.8%.
Meanwhile, the biggest winner was 8.4% back in 1991.
So you can get a feel for the recent history of the second half of December.
Take a look at the numbers for yourself:
We are not “cherry picking” here, either. If you go back 50 years (instead of 25), the numbers hold up. Over the last 50 years, stocks were up 80% of the time. And the average gain (during those roughly two weeks) was 1.6%.
As you can see above, if you pick a shorter time frame instead of a longer one, the returns are still good. The average return since 1998 was 1.8%, and stocks were up 81% of the time.
Of course, I can’t guarantee that stocks will go up…
It’s not even fair to say that there’s an 80% chance that stocks will go up.
You can say that, 80%-plus percent of the time, stocks have gone up in the second half of December. (Between the close on December 15 and the close on December 31.)
Will that happen this year? Each year is its own year, of course… But it appears that we have history on our side here…
I think there’s a high likelihood of a “Santa Rally” ahead.
Good investing,
Steve
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Source: Daily Wealth