The wintery change was no match for the hot January markets. January saw the S&P 500 up over 6% and the Bloomberg Aggregate Bond Index was up over 3%! The market MIGHT just be closer to “normalizing” and basing itself on company data versus interest rate news. That would be a welcome relief to all of us that had our investments swing so wildly over the past year. Here is an interesting tidbit from LPL’s Research Department, which is the graphic you see above:
--We hit the January Trifecta--
1) Positive Santa Claus Rally
2) Positive first five days of January
3) Positive January Monthly Return
This is a unique seasonality indicator that has only been hit 31 times since 1950. During these periods, the S&P 500 has added, on average, 12.3% to a 4.6% January gain between February and December, bringing the average gain for these years to over 17%. This sounds like a big gain, and it is, but keep in mind the average gain in the third year of the four-year presidential cycle is 16.8%, and the average year following a down year is up 15%. Furthermore, of the four years that overlapped with a recession, annual returns were all positive and averaged 34.8%. Even years with negative or limited earnings growth yielded positive average annual returns. By no means is seasonality flawless, as pricing patterns are historical tendencies and not a guarantee of future results. Within LPL Research, of course seasonal data is merely viewed as one input, among many. But being the optimistic investor that I am, that’s excellent news that I’m hoping will allow us a fantastic year.
House Cleaning Notes:
We have officially moved to our new location at 509 S Washburn, Oshkosh, WI 54904. For those of you that know the area, it’s the old Optivision Building in front of Tower West. We are south of Walmart and north of the fire station. There is still the old Optivision highway sign, but don’t let that deter you. The sign company said that they need to wait for it to get a bit warmer before they can change it. Come on in and say hi!
Thank you again for your trust in us. I truly believe our firm is unique with amazing clients like you. We are extremely lucky that you are all so great!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.