Many investors may be familiar with the Stock Trader’s Almanac published by Jeffrey and Yale Hirsch. This is a great book put out every year to give investors and traders all sorts of comprehensive data to evaluate on an ongoing basis. One of the studies that this father and son duo puts out tends to get a lot of attention in January because it focuses on the first five trading days of the year. The concept is very simple in that the performance of the S&P 500 during the first five trading days can be a leading indicator for the rest of the year. The data goes back to 1950 all the way through the end of 2011 and the results speak for themselves. Amazingly, the last 38 up first five days of the year for the S&P 500 have resulted in gains 33 times for the remainder of the year.
Past performance is no guarantee of future results. The S&P 500 is an unmanaged index. Investors cannot invest directly in an index.
Eric Marvin, CFP®, CRPC®
