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According to the Stock Trader’s Almanac, November is considered to be the best time to be a bull. If we take historical data and information since 1971, November is the best month for the S&P, the third best for DOW and the second best for NASDAQ.
However, it is important to note that not all sectors and individual stocks tend to follow historical trends. Even if they do, there is not enough evidence to support this fact. Many people follow season trends and patterns as they get an idea when to buy or sell during the year. But experts will advice you that you should not make your decision of buying and selling based on seasonal patterns and they are correct as you should see the market movement too for a particular stock.
However, if you want to see whether seasonal patterns of stock trading are against you when it comes to individual stocks, you have to take time to look up the historical monthly stock performance for that particular stock. There are many websites on the Internet that offer this information and if you want you can get this information on your own. The best way is to use the tool offered by Thomson Financial through AOL website.
In order for seasonal patterns and trends being in your favor, you should first make an effort to check out historical performance and ensure that the trends and patterns are as per your expectations.
A research was recently published by two University of New Hampshire researchers regarding seasonal patterns of stock trading. This research concluded that investors who want the best returns through the US stock market should invest in January as any investment made in this month usually generates the highest returns of any month of the year. On the other hand, investors should avoid buying stocks in September as they will get the worst returns.
The two researchers look at US stock market data from 1926 to 2006 to see whether any months in the year generated abnormal results and their research concluded that there were two months that did generate unusual results and these months were January and September.
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