I hope you all had an enjoyable Labor Day weekend, I know mine was.
Today I want to show some data from Mark Hulbert over at MarketWatch.com. Mark discussed in his piece this morning that according to data from 1896, whenever the DJIA is up for the year going into Labor Day, the rest of the year is positive 70% of the time.
From MarketWatch:
Since 1896, when the Dow Jones Industrial Average DJIA +0.69% was created, there has been a markedly better chance of the market rising over the last four months of the year whenever stocks were ahead for the year-to-date period through Labor Day.
And — need I remind you? — the Dow is up smartly this year through last Friday’s close: 7.1% higher, in fact.
Dow’s year-to-date direction through Labor Day % of time Dow rose from Labor Day through year-end Average Dow gain from Labor Day through year-end Up 70% 3.7% Down 51% -2.1% Recent experience has lived up to this longer-term pattern. Over the last 10 years, for example, there have been five in which the market’s year-to-date return through Labor Day was positive. In four of those five cases the Dow also rose from Labor Day through the end of the year; the exception came in 2007, the year in which the 2002-2007 bull market came to an end — in October.
Statistics like this are pretty interesting but aren’t something that should hold much weight in an investment decision. Although this does match up with the Presidential cycle, which also shows we should close out the year in positive territory.
Source: Stocks likely to end year higher than now (MarketWatch)
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