eResearch | The wise investor is acutely aware of the stock market’s historical trends from a seasonality perspective. This is even more important, and potentially can be very profitable, during these current market conditions of semi or quasi panic. In these circumstances, investors tend “to throw the baby out with the bath-water”. This opens up terrific opportunities for the nimble investor to take advantage of market weakness in quality stocks that have been pummelled in line with the significant declines in the market averages. As such, market sectors that are “in season” often provide exceptional stock-buying opportunities in these dire market conditions.
Seasonal Positive Strength for the Market Segments in February
The following table shows which indexes and sectors are “in season” during the month of March. The dates in GREEN under FROM are this month’s additions, and the one in RED under UNTIL is the lone expiry.
Changes For March
There are seven sectors added to the seasonality mix in March. These are Industrials, Consumer Staples, Health-Care, Financials, Utilities, Gas Utilities, and Natural Gas. The only sector to reach the end of its seasonality strength in March is the U.S. Dollar.
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.
Seasonality Trends Chart
The Seasonality Trends chart below 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.
//
