Seasonality Trends: For December 2019

Three Additions and Sixteen Expiries This Month

eResearch | The Seasonality Trends for December is a busy month for changes. Not to be forgotten are the Santa Claus Rally and year-end institutional window-dressing. Portfolio managers want to put their best foot forward and show a strong yearly performance. As year-end approaches, this usually entails selling the losers and running the winners. This situation, where institutions dump losing stocks, often provides an excellent buying opportunity for astute investors.

Changes For December

December sees 3 additions (Gold, Silver and Copper) to the seasonality mix while, over the ensuing four weeks, there are 16 indexes or sectors that reach the end of their seasonality strength, although in some cases, exiting the seasonality group is only temporary. Refer to the accompanying colour-coded chart in our monthly report for greater insight.

Importance Of Seasonality Trends

Seasonality refers to particular time-frames when stocks/sectors/indexes are subjected to and influenced by recurring tendencies that produce patterns that are apparent in the investment valuation process. A seasonality study preferably uses at least 10 years of data.

The chart in the Seasonality Trends report shows the periods of seasonal strength for 28 market segments (sectors/indexes). Each bar indicates a buy and a sell date based upon the optimal holding period for each market sector/index.

Seasonal Positive Strength for the Market Segments in November

SECTOR/INDEX FROM UNTIL
S&P/TSX Composite October 28 June 5
S&P 500 Index October 28 May 5
Dow Jones Industrials October 28 May 17
NASDAQ October 28 January 5
Russell 2000 October 28 December 31
DJ Transports October 28 December 8
Energy September 26 December 22
Materials October 28 December 22
Industrials October 28 December 22
Consumer Discretionary October 28 December 22
Consumer Staples October 28 December 22
Health-Care October 28 December 4
Financials October 28 December 22
Technology October 28 December 22
Utilities November 14 December 22
Banks October 28 December 22
Bio-Techs October 28 February 24
Gas Utilities October 28 December 22
Retail October 28 December 22
Metals & Mining October 28 December 22
Gold December 15 February 28
Silver December 15 February 28
Copper December 15 February 28
Natural Gas September 1 December 18

You can access the December Seasonality Trends report here: Seasonal Trends for December 2019

Seasonality Chart
Source: Equity Clock

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About Bob Weir 3002 Articles
Bob Weir has over 50 years of investment research and analytical experience in both the equity and fixed-income sectors, and in the commercial real estate industry. He joined eResearch in 2004 and was its President, CEO, and Managing Director, Research Services until December 2018. Prior to joining eResearch, Bob was at Dominion Bond Rating Service (DBRS).