History suggests that the rally is set to continue, according to Goldman Sachs. Its study of European markets (going back to 1974) shows that the average market performance in both December and January has been positive 70% of the time. The first and fourth quarters are typically strongest, supporting the 'sell in May' rule.
What's more, strong January to November performances point to a strong December. When the market has gained more than 20% in the first 11 months as in 2009 the average December return has been 3.6%. But don't take these seasonal patterns too seriously. Another one widely highlighted is the January effect, evident in the S&P 500 between 1940 and 2003 the first month sets the tone for the rest of the year, says Tom Stevenson in The Sunday Telegraph. That fell "flat on its face" this year the S&P tanked in January but has since rocketed.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The big picture: gold is the safest currency of all
-
‘Inheritance tax insurance’ enquiries are soaring – but is it worth it?Premiums for whole of life insurance can run to £5,000 a month to cover a £300,000 inheritance tax bill, with policies costing more the older you take them out.
-
MPs warn over Lifetime ISAs which could leave savers out of pocketThe Treasury Committee has highlighted confusion around the Lifetime ISA withdrawal charge, which risks consumers losing “a significant part of their savings”
