Friday, 4 October 2013

The 17.6 Year Stock Market Cycle Combined with the Halloween Indicator Smashes Dow Jones Buy and Hold Return

Investors are often told that market timing is a fools game; time in the market beats timing the market. My new research on the well known Halloween Indicators shows that not only is market timing possible, but when combined with my 17.6 Year Stock market Cycle, it has lead to an incredible outperformance versus a Dow Jones Industrial Average (DJIA)  buy and hold strategy.

The graph above, taken from my original research, shows that a long/cash strategy returns 19 times the DJIA return since 1897, whereas a long/short strategy returns 121 times the DJIA return over the same period. This also beats other well known Halloween based strategies as well. Full details of teh strategy and results are here.

Now that we are in October and stock markets are looking increasingly uncertain, it is worth noting that 31 October 2013 is the next buy date for this strategy.