Wednesday, September 24, 2014

Equities: "Sell Rosh Hashanah, Buy Yom Kippur?"

The Jewish New Year begins at sundown the evening of Sept. 24.
From Barron's Stocks to Watch:
This year has been terrible for seasonal strategies. Sell in May and Go Away? You would have missed out on a 6.5% return in the S&P 500. Avoid the stock market during a mid-term election year? You would have missed out on a 9.2% return. So much for seasonality.

But with markets weakening ahead of Rosh Hashanah, the Jewish New Year, maybe it’s time to think about selling before the High Holiday. In a post from Sept. 7, the blog Humble Student of the Market explains why it’s taking that maxim seriously this year:

…the strategy of adopting the Wall Street adage of sell Rosh Hashanah, buy Yom Kippur may not be a bad idea. Bespoke showed the profitability of such a strategy in 2011. Though the sample size is relatively small, the strategy did show a negative bias in equity returns during such a period....MORE
S&P 500 1996.29 up 13.52; DJIA 17,202.88 up 147.01.
Now about the Blowing the Shofar joke...
See also:

April 30
Debating "Sell In May, Go Away..." 
I've mentioned we don't have much time for calendar effects. 

May 28
Equities: 2014 as Analog to 2007 
We are still in a bull market and markets being perverse we'll probably have a summer rally that drives the Sell in May folks insane. Their prayers for a correction to scale back in on go unanswered and in their madness to participate they put in the top.
Or something.

July 2
The S&P 500 May Never Pull Back