The final weeks of 2012 are upon us. This season has historically been the best performing of the year. Last night I reviewed the early Christmas shopping and the results beat expectations, China showed improvement and so did Germany. To top it all off, the stock market produced some strong gains last week supporting my Nervous Nellie indicator which I talked about last week.
History shows us that you have more chance of making money than losing for the next month by 76.9% with a median return of 6.85%. The real positive is that during the first year of a Presidential reelection the chances of making money is 91%. However, don’t try to chase stocks here if you are holding cash. The market has had a fairly good year so add to winning sectors and look for those that have not participated in the rally.
My point here is if you feel like you are missing the rally or still skeptical about the economic environment and hold cash, proper diversification and rebalancing would have kept you in the game and not suffer some of the missteps listed above. Expect volatility as we close out the year but it is not going to be a negative for the market.
Thanks for reading