The stock market follows seasonal patterns. As part of any market timing strategy, you need to understand the forces that act on the market. From ‘go away in May’ to ‘Santa Claus Rally” there are actions that the market takes, year after year that can help keep you positioned correctly into the market. The first 5-7 days of January are also a good indicator on the future of the market.  Also, pension fund rebalancing is significant.  As the market rallies, pension funds have to rebalance (sell stocks) and buy bonds to maintain their target ratio.   Right now, there is an imbalance of bonds to stocks given the rally and stocks will sell off.  2017 also bring some key Euro elections.  And a new US administration.  We’d be a seller of stocks in early 2017!

stock market seasonality

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