Seasonal Shifts In Markets

Jun. 23, 2021 12:47 AM ET, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 1 Comment
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Summary

  • Seasonal headwinds are setting in for stocks.
  • Looking across assets, risk assets tend to underperform from June-Nov, and defensive assets tend to outperform during that same period.
  • The internal consistency across markets makes intuitive sense and highlights the importance of seasonal patterns in market analysis.
  • That said, there are many exceptions to the rule, and thus seasonality should never be the primary component of an investment thesis.
One tree in different seasons
FrankvandenBergh/E+ via Getty Images

Seasonality in the stock market is a relatively well understood and widely researched phenomenon. There are a few different sayings such as “Sell in May“ or the “Halloween Effect,“ but all refer to the tendency for stocks to be dead money from around June through

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