Will 2005 Continue the "5" Trend??

[SystemTrader]

An interesting (trivial?) fact from a market historianfriend of mine...

During years ending in "5" (1985,1995, etc.), the S&P 500 gains 26% annually. In fact, there hasn't been alosing year ending in "5" since 1945. Is this a coincidence, or has it become a self-fulfilling prophecy? There wasa lot press about this in 1995, andwe'll probablyhere more about itagain this year.
My stock model accounts for some seasonal patterns, but not this one. It will be interesting to see if this trend continues next year, though.
Regards,
John

[Safetyguy]

Unless I looked it up wrong, here are the actual numbers (and it goes back to 1935). It seems like 1965 is an exception to an otherwise interesting pattern.

1935 47.67%

1945 36.44%

1955 31.41%

1965 12.31%

1975 37.23%

1985 31.60%

1995 37.45%

Very Interesting!!!!:^

[SystemTrader]

Thanks for posting the actual numbers, SafetyGuy! Heck, even 12% in 1965 isn't too bad.

John

[Mike]

I'm guessing part of it is due to where these years have fallen in the business cycle historically. Recessions have hit us in the beginning of decades: '01, '91, '81...

[tsptalk]

Tug -o- war

source: http://www.equitrend.com...

"Looking ahead to 2005, the year following an election generates the poorest returns on the Dow Industrial Average according to the 4-year Presidential Cycle principle. Between 1833 and 2003 in forty-two cycles, the post election year averaged a return of just 1.6%. This compares to an average return of 3.8% for mid-term year, 10.3% for pre-election year and 6.8% for election year.

Labelled the Post Election Syndrome by The Stock Trader’s Almanac authors Jeffrey and Yale Hirsch, the year following an election is the best one to be away. With a persistent hangover from the 2002 recovery, the highest ever levels of total credit market debt, burgeoning government and trade deficits, a battered dollar and escalating war in Iraq, the next year presents more challenges than normal.

But looking on the bright side, between 1886 and 2003 years ending in 5 have been the strongest of the decennial pattern with an average annual return of 31.6% return. Years ending in 8 came in distant second with a return of 18.5% and years ending in 0 were worst with an average loss of 6.9%. Since 1833, there have been seven post election years ending in 5, the last being 1985. The average return was 23.1%. So we can’t automatically count 2005 out just yet."

[smedlap]

Tom, help! Thought I should share my experience as I do not fully understand it, but like the end results. I was 100% in the I fund as of Monday morning. EFA closed that day with a 0.91% posted gain. Good kick with dollar exchange rate and when I plugged in the TSP posted amount on Tuesday morning, my percentage gain really rose to 1.28% for that earlier day’s result.



On Tuesday, I had (Mon morning made a transfer request) moved 100% into the S fund where I remain. The posted close for the day was 1.07%. Boy, was I now really happy, especially thinking I had made double what I fund had gained. When I looked at my TSP account this Wed AM, I had more in it then my work 1.07% template had calculated. Loading the TSP $ figure, it recalculated a true gain of 1.64% day. My template is tested and not faulty. The increases must have to do with trailing dollar fluctuations. Further, these dollar impacts do not appear to be reflected in the historical share price??? Have to think about this latter point. But I was even more happy to note this AM that even though EFA had reflected a 0.7% gain yesterday, it actually lost .05 share price points and the F fund – gained16.



I ended with a 2 day true gain of 2.92% in to the account in posted dollars. These are facts.



Pile in guys and tell me how it happened???


Happy holidays all, heading to Phoenix at 18:00 tonight and a birthday! Yes, I will look at t

[tsptalk]

smedlap wrote:
Pile in guys and tell me how it happened???
My answers are pure conjecture, butare you looking at the S&P, Wilshire and EAFE (or EFA) to base your assumed results? We know they are not always accurate to our fund prices.

If the S&P 500 goesfrom 1198.76to 1205.50, it was up .56%. If the C fund was 12.00 a share and it went up .56% it would have to go up .0672 cents, but since it has to be done in whole cents, it may show 6 cents (or maybe 7 cents) which changes the percentage returned. It won't always be 100% accurate.

Does thathelp at all?
Thanks,
Tom

[teknobucks]

Safetyguy wrote:
Unless I looked it up wrong, here are the actual numbers (and it goes back to 1935). It seems like 1965 is an exception to an otherwise interesting pattern.

1935 47.67%

1945 36.44%

1955 31.41%

1965 12.31%

1975 37.23%

1985 31.60%

1995 37.45%

Very Interesting!!!!:^

good url to retrieve this type of data:
http://www.investmenttools.com/equities/fundamentals/bear_markets_of_the_last_100_years.htm