IS SUMMER A GOOD TIME TO BUY STOCKS?
Summer is officially here and that usually means less people are buying stocks and volumes go down. This is because people are involved with so many other things such as vacations, family events, and doing things outside. There is a lot less activity as a whole online during this time of year and that includes stock market trades.
Lets take a look to see how the stock market has done during the summer over the last 9 years by looking at the Dow chart below. I’m just eyeballing things here (looking at the middle parts of the chart for each year), but most of the years are pretty easy to tell how stocks fared during the summer:
2002 – down
2003 – up
2004 – down
2005 – up
2006 – up
2007 – up
2008 – down
2009 – up
2010 – up
I think it is safe to say that there is no real trend as stocks performed in line during the summer months with the rest of the year. The only exception looks to be 2004 where stocks were down in the summer but slightly up overall for the year.
Some people who buy stocks are always looking for any trends they can spot that will give them an advantage. The Santa Clause rally where stocks often go up the week after Christmas is one of those but there doesn’t seem to be any pattern for summer. Buying stocks during the next three months gives you no advantage or disadvantage timing wise.
