The consolidation (which was expected) seems to be ending as I write this on Thursday afternoon. The minor pullback will be discussed as the week plays out. I even had a prospect call and see if we were getting out of the market because of the Ebola scare. All I know is stocks just got cheaper.
Historically, the fourth quarter has been very favorable for equities. In fact the S&P 500 has made more than half of the index gains over the past 25 years during the final three months of the year. Since 1989 the S&P is up 612% with 52% coming from the fourth quarter with the third quarter being the worst.
So here are three things that might make this a winning quarter:
- Sell in May goes the other way
- The Presidential Cycle
- The Santa Claus Rally
The S&P just extended is winning streak to seven straight quarters, and it’s reasonable to wonder just how long it can continue. Some investors are also worried that the Federal Reserve’s winding down its economic stimulus, or QE.
History is on our side and this pullback was needed.