Our Seasonal Switching Strategy, which is based upon the “Best Six Months” in conjunction with our MACD Technical Buy and Sell Signal signals, has a solid long-term track record of outperformance with potentially less risk compared to a buy and hold approach. Since 1950, DJIA’s average annual gain has been 8.5%. Over the same time period, DJIA has lost an average 0.7% during the “Worst Six Months,” May through October, and gained an average 8.8% during the “Best Six Months,” November through April.
In post-election years, the historically worst performing year of the four-year cycle (page 130, STA 2021), the “Worst Months” have not been all that bad with more positive periods than negative, but average gains over the six or four month (NASDAQ’s Worst Months are July-October) period are still paltry. It is also worth noting that the one election year with a double-digit “Worst Months” S&P 500 gain, 1980, was followed by a tough “Worst Months” in 1981 (shaded in light grey in table).