Over the years I have learned two things about seasonal trends in the financial markets:
1) They’re great
2) Especially when they work
In a nutshell, a well established seasonal trend – i.e., a tendency of a given index, market, commodity or stock to decline (or fall) on a consistent basis during a repetitive time frame – can be extremely useful in telling you what a given market “should” be doing. The catch of course is that a seasonal trend does not tell you what a market “will” be doing the next time around. So a little common sense comes in handy (and if there is one thing that people have said consistently about me it’s that I have little common sense, er, I mean “a” little common sense).
A Bullish Seasonal Trend in Energy Stocks
Figure 1 displays the annual seasonal trend for Fidelity Select Energy fund (ticker FSENX), over the past 25 or so years. ... [Read More]
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