Tags: Hulbert | August | stocks | Mistal

MarketWatch's Mark Hulbert: History Shows August Is Great Month for Stock Gains

By    |   Wednesday, 30 July 2014 11:32 AM

The truth about the stock market during the month of August is that historically it does not deserve its bad reputation and it's not even a money-losing month on average.

MarketWatch columnist Mark Hulbert looked at data going back to 1896 to conclude that August is actually one of the best months of the year for stock market performance.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

The finding punctures one of Wall Street’s most enduring beliefs: the dog days of August almost invariably tend to be bad ones for equities.

“After all, the month comes right in the middle of the seasonally unfavorable six-month period that is often known as ‘Sell in May and Go Away,’” Hulbert wrote. “And everyone ‘knows’ that light trading volume, like what is experienced almost every August, isn’t generally conducive to higher prices.“

He showed each month's average move in the Dow Jones Industrials going back to 1896:

 Month  Average DJIA return since 1896  
 July  1.46%  
 December  1.43%  
 April  1.21%  
 August  1.13%  
 January  0.94%  
 November  0.94%  
 March  0.83%  
 October  0.30%  
 June  0.25%  
 May  -0.07%  
 February  -0.16%  
 September  -1.06%  
     
     




















Hulbert said the results prove there is no seasonally based reason that August will be a bad one for stocks, at least over the long run.

“This doesn’t guarantee that the market will perform well in August, of course. But if stocks do decline over this coming, it won’t be because it’s August.”

At Stock Trader’s Almanac, however, Christopher Mistal & Jeffrey A. Hirsch concluded that in recent years, August still deserves its bad reputation.

“It is the worst DJIA and S&P 500 month since 1987 with average declines of 1.3% and 1.0% respectively. August is also the worst month for NASDAQ (-0.3%) and Russell 2000 (-0.7%) over the same time period,” they wrote.

“Sizable back-to-back declines in 2010 and 2011 have widened Augusts’ average losses,” Mistal and Hirsch wrote.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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The truth about the stock market during the month of August is that historically it does not deserve its bad reputation and it's not even a money-losing month on average.
Hulbert, August, stocks, Mistal
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2014-32-30
Wednesday, 30 July 2014 11:32 AM
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