Posted by Ryan on November 4th, 2007 in Investment Strategy

It’s stock market performance season and market timing experts are well aware that stocks should give solid returns over the next five months. Historically, the market tends to perform best between the beginning of November through the end of April. This period is when the major indexes earn almost all net gains, whereas May through October tends to be a flat, or sideways, performing market. Secondly, we have more historical data that shows that pre-election years are very strong opportunities for making money in the stock market. The year immediately prior to a presidential election has been the best performing year historically in the stock market. Stocks will continue to do well through the first year of the presidential election, and worst during the two years following the election.

If you are trying to make money by market timing, these two seasonal indicators tell us to buy stocks now. The combination of the November through April stock performance season and being in a pre-election year are strong indicators for tremendous stock growth. Be sure to consult a financial advisor before making any major decisions. The stock market has also recently been on quite a bull rush and reached new highs, but has been followed by a great deal of volatility. The instability of the housing market and other economic indicators have also created discussions about the economy possibly entering a recession.

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