Andrea Alms Video:  Money In Motion 88 - Stock Almanac

TRANSCRIPT Hello, my name is Andrea Alms. I am technology investor and financial manager and this is your money in motion. What is it? As we come upon the New Year, the Stock Almanac comes into conversation. Mr. Yale Hirsch founded an investment firm and created a publication that he called Stock Trader Almanac. In 1967, Stock Trader Almanac was published, and every year since the Stock Almanac examines the effects of election cycles and other seasonal behaviors on the financial markets, it is a reference book providing a roundup of the year's data and encapsulates historical price, information patterns, seasonality and trends into a calendar format.

Some takeaways that I learned from the Stock Almanac and its chief editor, Jeffrey Hirsch. Regular Patterns of Behavioral Finance Mid Month Spike Santa Claus Rally January Effect January Indicator Trifecta and the U.S. Presidential Cycle Mid month Spike. It is the monthly five day bulge. It is considered the best five days. These five days consist of the last trading day of the month and the first four days of the month when people pay their bills monthly, resulting in a spike mid-month where cash is coming into the market in the middle of the month.

Santa Claus rally. It is a pattern and indicator. It is the tendency of the S&P 500 to have gains during the last five days of the year and the first two days of the year. Most people are on holiday except for the professionals who are at the desk and buying January effect is a seasonal pattern with small cap outperforms large cap.

As you may recall, small cap is a stock from a public company which total market value or market capitalization is about 250 million to 2 billion. Large cap refers to a company that has a market capitalization value of more than 10 billion in the January effect. The Russell 2000 perks up as a January sets the tone where people are looking for the future and the new year January indicator trifecta is when you have a run of three wins or in this case, three increases of one.

The January effect, plus two increases in the Santa Claus rally, plus three increases of the four month January barometer. According to the stock Almanac, Since 1950, when all three indicators are up, S&P has been up 93% of the time. Presidential cycle third year in a presidential term is bullish. Since 1928, the third year of the presidential cycle has produced positive S&P 500 returns 78% of the time, January 13.5% average return versus the all year average of 7.7%.

Happy New Year. Thank you. This is your money, your money, in motion.