DJIA
Forecast
Signal 1900-1925
Signal 1926-1950
Signal 1951-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


S&P 500
Forecast
Signal 1950-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


NASDAQ
Forecast
Signal 1950-1975
Signal 1976-2000
Signal 2001-2005
Historical Prices


40 Year History
Prime Rate
Mortgage Rates
Treasury Rates
CD Rates
Observations:
● Virtually all stock market gains occurred from November through April.
● May through October returns have been poor.
Dow Jones Industrial Average:  Historical Returns
  Jan - Dec
(Average)
Nov - April
(Average)
May - Oct
(Average)
May - Oct
(Best)
May - Oct
(Worst)
1950 - 2005
7.3%
7.4%
- 0.1%
19%
-20%
1900 - 2005
4.8%
4.1%
0.7%
36%
-34%
2001 - 2005
0%
3.7%
- 3.7%
16%
-15%
Returns for the November - April, May - October and January - December periods are shown for
1950 - 2005,  1900 - 2005 and 2001 - 2005. Dividends are not included.
Summary (1950 - 2005):
November - April  averaged 7.4%. May - October broke even (- 0.1%). So... January - December
averaged
7.3% (7.4% - .01% = 7.3%). Investors would have been better off if they had invested in the
Dow from November 1st through April 30th and kept their funds in CDs from May 1st through October
31st. Stocks have not historically made money during the May - October period.

During the six month May through October period, an investor in the Dow would have lost one-tenth of
one percent, on average (
- 0.1%). The above figures represent AVERAGES. There have been many
exceptions. The best May - October performance was
19% (1958). The worst was -20% (1974).
How do I use this information?
1) Have realistic expectations for the next 6 months (May - October). We have had a 7.7% rally in the Dow
(from 11/1/05 - 4/18/06). While that is a typical return for the November - April period, it is not typical of the
coming 6 months. Do not allow recent gains to influence your expectations for the near future.
2)
Be emotionally and financially prepared for a bumpy ride until November.
3) Make sure you have funds available to invest around November 1, 2006 since that has historically been
the beginning of the strong half of the year (7.4% average since 1949).
In the next issue of Investment Tips:
Declining interest rates are typically good for stocks.  But... the current period is not following the historical
pattern. You'll see the 90 year record in the next issue of Investment Tips!
4/21/06
Link to Previous Issue of Investment Tips
Does April 15th Put a Lid on Stocks?
You can bet on it!
Click the above link to the 50 year record.
 
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