James Altucher beat me to it. I've been trying to clear space to test this same idea the media is bantering around all over the place. Blindly blabbering the study without really knowing it's validity.
So, kudos to James for demistifying the Five Days In January Effect. Read here.
You can see from his posting that the first five days in January are no different than any other five day period. But, there are some points to ponder for the month of January as James points out.
There are many studies, notions, and generalities about the market that when the pencil hits the pad are proven wrong, invalid, or just flat out stupid. Other studies might have been true at one time...but change as market participants take advantage of the inefficiency.
Take for instance the buying of the Dogs of the Dow. Typically you buy the first trading day in January. But, over time, people figured out you could buy the underperformers earlier...sometimes as far back as October to supercharge your gains. So, the strategy changes or shifts. And sometimes it comes back full circle.
That's the problem with date or time specific trading strategies.
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