The swimsuit indicator says buy stocks

What does everybody's favourite indicator tell us about stocks?

With the economic backdrop so unclear, investors can be forgiven for clutching at any piece of information that might give them a steer as to what will happen next. That's why Alan Abelson, in US financial newspaper Barron's, urges his readers to buy the latest Sports Illustrated swimsuit issue, which as always, has a cover sporting a model wearing "a bit of a bikini".

What's the significance? This year, the model in question is American. According to Bespoke Investment Group, since 1978, when an American model has "graced the cover" of the swimsuit issue, the key US stock index the S&P 500 ended the year higher 88.2% of the time, and made an average annual return of 14.3%. When a foreign model was pictured, the average return was 10.8% and the index rose just 76.5% of the time.

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