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
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