The leading stock indexes (SPY) (DIA) (IWN) closed down a fraction Thursday and are only up about 1% this month. While it seems the month could go in either direction, history suggests there are more gains to come.
Via Ned Davis Research is the following illustration of the odds of each day around New Year finishing up or down, using data from 1928 to earlier this year:
The vagaries of our technology mean it’s a bit small, but this shows the last 21 trading days of the year (left side) and the first 21 trading days of the year (right side).
As you can see, over the period there are more up days than down days, and the final trading days of the year in particular have been good for stocks.
Of course, past performance doesn’t equal future results, and the more bearish person may argue this year is out of the ordinary; but 80-plus years is a pretty broad range, and a lot happened over those decades. Food for thought, in any case.
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