Thankgiving Week

11-24-2004, 11:25 AM

This is an interesting article from a newsletter I receive. I'll be going 100% G today because my system is telling me to, but it's nice to know the trends are behind me too!! :^

Good luck,

M_M

In terms of investing, Thanksgivingoffers some evidence that suggests a Seasonality Timing System,
first
introduced by Norman Fosback three decades ago, that can add a considerable
boost to your returns. Hulbert Financial Digest editor Mark Hulbert,
who
tracks the system, has found that this "simple, mechanical timing
system,
based on nothing more than the calendar, has beaten every other market
timing
system that the HFD has tracked over the past 20 years."

Generally speaking, the Seasonality Timing System suggests that
investors
who dollar-cost average should schedule their monthly investing around
the
first and last trading days of the month. Doing so, according to Mr.
Hulbert --
i.e. switching between cash (specifically a money market fund) and the
market
(specifically the Wilshire 5000) -- would have yielded a 15.4% return
over the
past 20 years, versus a 12.8% return for a buy-and-hold market
strategy. The
system has also proven much less volatile than a buy-and-hold strategy
-- 45%
less.

The specific rules call for buying at the close of the third-to-last
trading
session of each month and selling at the close of the fifth trading
session of
each month. The rule is similar for holidays when the market is
shuttered: Buy
on the third-to-last trading session prior to a holiday and sell at the
close of the
last trading session prior to a holiday.

Every rule has its exceptions, of course. When the holiday occurs on
the first
trading session of the week, which is usually a Monday, evidence
suggests
waiting to sell until the close of the trading session after the
holiday.

Thanksgiving is another exception. The rule here is to wait to sell
until the
close of trading on Friday.

Why does Seasonality Timing work? Theories abound. One theory is that
investors who dollar-cost average tend to do so around the beginning of
the
month. Another theory suggests it's a function of investor behavioral
health:
When investors are happier, they tend to buy more than sell.

You needn't dollar-cost average to exploit this weirdness. Just knowing
how
most investors act in certain situations can pinpoint propitious entry
points.

Thanksgiving can't quite be counted on to deliver excess returns, but
going
back to 1950, the Tuesdays and Wednesdays before Thanksgiving have been
positive days for the market approximately 60% of the time.

That's not really compelling, but it does give the turkey leg up to
Thanksgiving, and anything that increases our odds is worthy of
consideration.
Add to the mix the fact that we've entered the sweet spot of investing,
the
November-April period, which has outperformed the May-October period
70% of the time, and by a huge margin, and you've got a spicy recipe,
indeed.

Gobble-gobble.

**Rod** · 11-24-2004, 12:13 PM

mlk_man wrote:

This is an interesting article from a newsletter I receive. I'll be going 100% G today because my system is telling me to, but it's nice to know the trends are behind me too!! :^

Good luck,

M_M

"Thanksgiving is another exception. The rule here is to wait to sell
until the close of trading on Friday."

Doesn't this mean you should wait until Friday to go 100%G to be effective on Monday?

Or am I misinterpreting what you or the articleare saying?

11-24-2004, 12:17 PM

Rod wrote:

Doesn't this mean you should wait until Friday to go 100%G to be effective on Monday?

Or am I misinterpreting what you or the articleare saying?

Yes it does, but like I said, my system is telling me to switch now, gotta keep emotion out of it, or at least try.............:h

Good luck

**Rod** · 11-24-2004, 12:31 PM

mlk_man wrote:

Rod wrote:

Doesn't this mean you should wait until Friday to go 100%G to be effective on Monday?

Or am I misinterpreting what you or the articleare saying?

Yes it does, but like I said, my system is telling me to switch now, gotta keep emotion out of it, or at least try.............:h

Good luck

I know what you mean!

**smine** · 11-24-2004, 02:12 PM

Rod, will you go to 100G today for Friday?

**tsptalk** · 11-24-2004, 02:17 PM

Thanksgiving is another exception. The rule here is to wait to sell until the close of trading on Friday

Hey, that's what I thinking of doing

Being out for Monday (or Tuesday).

**smine** · 11-24-2004, 02:34 PM

When will you decide that, Tom? It has been by experience that 10 minutes til cut-off time and suddenly this forum is in limbo.....unable to get all opinions before I make mine. Don't wait too late to decide!

**Mike** · 11-24-2004, 02:59 PM

Interesting read. The only reason I could see for moving something out of stocks at the end of the week (in my case) is if I have reason to believe the prices will drop below my entry point at the close of last friday. I don't see any compelling reason for that to happen... unless the dollar continues to free-fall and worry investors about slowing consumer spending.

**Show-me** · 11-24-2004, 03:10 PM

I'm thinking of getting out today also, but for different reasons. I will be traveling this weekend and Friday will not be near puter to watch the market in case something weird happens.

**Rolo** · 11-24-2004, 03:12 PM

So, the idea here is to sell at COB Friday (order by 12 ET today) and buy back Monday or so COB?

**puertorico** · 11-24-2004, 03:29 PM

smine wrote:

When will you decide that, Tom? It has been by experience that 10 minutes til cut-off time and suddenly this forum is in limbo.....unable to get all opinions before I make mine. Don't wait too late to decide!

Smine ,
So what u think about today ,move or stay put ?

I think will stay put until friday but no sure yet.

Depent of the comment,I will move safe or stay...

**puertorico** · 11-24-2004, 03:30 PM

smine wrote:

When will you decide that, Tom? It has been by experience that 10 minutes til cut-off time and suddenly this forum is in limbo.....unable to get all opinions before I make mine. Don't wait too late to decide!

Smine ,
So what u think about today ,move or stay put ?

I think will stay put until friday but no sure yet.

Depent of the comment,I will move safe or stay...