Midweek: News or Noise?!

News or Noise with Chris

 

The investment team at Oak Harvest Financial Group is pleased to introduce a new mid-week release in which we will examine a news item, headline, or story making the rounds from publicly available sources and ask, “Is it News or Noise?”

As you know, our constant advice for investors is to “tune out the noise.” But sometimes it is hard to know what’s noise and what’s not! That’s what this series is going to be about.

Our goal here is to approach these stories and each topic from an independent, investor-first, standpoint, divorce ourselves from personal feelings, emotional bias, or political opinion, and briefly analyze what we believe each story means for investors.

These are going to be quick, casual, opinion pieces, and while we will use data to derive our conclusions, we will be wrong in our interpretations, at least some of the time. However, we are looking to practice what we preach, and help investors to rationally and critically analyze emotion laden stories.

So with that said…

News or Noise?

Markets always “Seasonally Swoon” during late Summer early Fall

News or Noise: Noise

Since 1989, the 3rd weakest 3-month period for stock market returns has come in the months of August through October; however, that period still averaged a positive +1.92% return. This late summer period had the lowest probability of a positive return (positive only +55% of the years).

However, since the Federal Reserve launched QE (Quantitative Easing) in late 2008/early 2009, attempting to time the market around this dynamic has been faulty at best and a disaster at worst, particularly during QE-induced, positive, first-year presidential terms like 2021.

During this cycle, for the three previous first year Presidential term years of 2009, 2013, and 2017, each of the August through October periods yielded positive gains of 4.2-4.95% cumulatively.

Moreover, out of the 12 months after August from September through December in those years, there was only one month with a negative total return and loss, October of 2009, down around -2%.

Historical Data

Our view? The notion that there is always a late summer/early fall “swoon” is…noise!

 

This content contains general information and express the views of Oak Harvest Investment Services. All data, articles, and information cited are believed to be reliable at the time of creation; however, Oak Harvest does not warrant any information contained herein to be correct, complete, accurate or timely.

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