Forum Archive Index - February 2001

["Chris Slater" <chris.slater@xtra.co.nz>]

Interesting. I chose Friday close-off as the most convenient for reporting and charting, the Saturday papers carry the weekly chart I need, and I can consider the following week’s investment tactics at leisure. Otherwise I figured any stable point would do.

I have noted that prices tend to rise on Monday and Friday, but fall Tuesday through Thursday. In other words, sell at the beginning and the end of the week, and buy in the middle. Influencing Tueday is the US market, opening after ours closes, and US stocks tend to do poorly on Mondays (Siegel, Stocks for the Long Run).

I was ready to buy back in to WHS at $5.05 because my charts told me to (40-wk moving average +/- 10%) but they don’t work too well where average weekly gains are over 1%, as they have been since October ‘98. Bear in mind, of course, that sharemarkets and individual stocks therein deliver their greatest benefits over a short period only. (http://www.garethmorgan.com/principles/010109_1.asp ) The strategy would seem to be to select a well-managed company and maintain a core holding, since monitoring is easier and you get all the news and dividends. Then buy in during a dip towards the end of the flat period and exit that holding once things flatten out after the next rise.

I’m sure you’re right about WHS timing, with prices starting to rise again in May/June as it did in ’97, ’98, and ’00. ’99 was the exception, with all the gains made by March. But note what I wrote in my weekly share-club newsletter last October.

For what it’s worth, I’ve tracked the best and worst months for my investments (56% NZ, 8% Oz, & 36% international) over the last five years, based on rises v falls for each month. Worst are Jan, Feb, Apr and May, each with one more fall than rise. Best are Jul, Oct and Dec, with no falls. Aug and Sep are affected by Northern Hemisphere holidays but are neutral. The Jan/Feb nadir is probably caused by our post-Xmas debt recovery, holidays, and forthcoming tax payments. In percentage gain terms winners are Jun and Dec, with Oct a close third. The average of the first five months of the year yield a total 1.1% gain, the last seven 12.3%. Moral? Dump in December, buy in May. Very chartist.

 

Regards

 

Chris Slater