Chapter IV: A look at Traditional Seasonal Analysis of Southwest Bell Communications Historical Prices identifies the best and worst months to be invested. |
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| A non-typical Seasonal Pattern is shown by Southwest Bell Communications. For the average common stock, low prices are most likely previous to the month of November. Averaged over the last 21 years, SBC exhibits a strong spread between the high and low months of 10.65 percent. For this chart, price plots for each year are traced on top of each other. Each month's value is adjusted to the mean price for the particular year. The orange line represents the average monthy price expressed as a portion of the annual price. |
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| SBC speculators might well avoid the month of August. Here, the profitability of the month is defined as the percentage change between the mean price on the first day of the month and the mean price on the last day of the month. So the figures displayed here refer to the average change during each month, rather than changes between months. |
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| The 'Monthly Profitability' discussed above applies to holdings during the course of a single month. Another, perhaps more realistic evaluation is the one charted here. Here the value evaluated is the highest price reached at anytime during the next quarter. Southwest Bell Communications speculators who have taken positions starting in September gain 13.55 percent, judged by the maximum price attained during the next three months. |
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| This plot of the average monthly price as a proportion of the average yearly price removes the year-to-year secular trend. However the within-year trend is still intact, so it is expected that the December value might be higher than the January average, for a healthy company. The potential gain has been 10.65 percent from March to the next December. This is 14.20 percent when converted to an annual return. Investing 'against the tide' of the seasonal trend can cost an annualized 42.60 percent. Before making any decisions based on the standard 12 Month Seasonal Calendar, be sure to check the characteristics of the 24 Month Political Election Calendar. Research shows that many characteristics of the traditional seasonal averages are actually induced by events in the 24 month political cycle, so the characteristics of even versus odd numbered years may be quite distinct. |
Much Deeper Market Timing Analysis with SBC roadmap and Summary of most effective indicators: |