Happy New Year! If market history is any guide 2009 should begin on a good note. We analyzed the DJIA going back to 1900 and looked for years where the index was down 20% or more. Surprisingly there were only 11 instances including 2008; and only one that occurred after World War II! Below we highlight a month-by-month picture of the years following those nasty declines. In every year but one the market has gained for an average price return of 4.07% (January, 1904 the Dow was unched; this was counted as a gain for the purposes of the chart).
Results vary for the following months; although there is a generally positive bias for the year.
Lat year this time it was the "Goldilocks" market, not too warm, not too cold, and everyone was happy until the Papa Bear came home and ate them alive. Now it's the "Tinkerbell" market, where it's dead, but everyone thinks that if they all clap together as hard as they can they can bring it back to life.
I don't disagree about January, I just don't want to be in the way when people get tired of clapping.
Posted by: Tom O | January 02, 2009 at 01:12 PM
Somewhat of concern that you have a lot of blogster company in your bullishness, Mr. B.
A glance to the right reveals just 13% of bloggers bearish.
Posted by: j'adoube | January 04, 2009 at 01:18 PM