The first strength is in the 30 year bull-bear market cycle. The market is at a point in its 15 year downturn where it has historically experienced a brief (12 to 18 month) recovery. We looked at this in detail in a recent lesson you can review here.
The second reason is seasonality.
In a study of the Dow over 30 Years it had 8.16% growth overall.
However all the growth (8.36%) came in the months of November to April.
The Dow rose only an annual average 0.37% in the months of May to October.
$100 invested in the Dow for those 30 years grew to $848 overall.
If the $100 was invested only in November and withdrawn in April it grew to to $1,067.
If the $100 was invested only in May and withdrawn in October its value dropped to $79 over the 30 years!
This does not suggest that we should only invest in equities from November through April. It does show that if the market is goig to recover…the most likely time is now.
We still look for value. These studies of timing simply help us know when value is most likely to be fund.
We’ll review the third market strength next lesson.
Join Merri, me and Jyske Global Asset Management at one of our courses. We review economic conditions, Ecuador real estate, my entire portfolio plus investing and business ideas for the months ahead.
International Investing and Business Made EZ Ecuador
Enjoy the beauty of the Andean countryside.
Visit the wonderful crafts markets and save on your Christmas shopping.
See beautiful property in our area for sale.
Plus we’ll see homes at San Miguel and Prima Vera II.
Primavera II $46,000 condos.
Nov 10-11 Cotacachi-Imbabura Real Estate tour
Then travel to the coast and enjoy this Pacific surf that in November is warm!
Enjoy Ecuador ’s empty beaches.
November 12-15, 2008 Ecuador Coastal Real Estate Tour;