The fall and winter months are typically the best time to be in the stock market. Unfortunately, the market usually has some rough patches in this time frame. You can still make double digit returns if you have a system of buying the pullbacks and selling the high points. In addition, some stocks will have tradeable spreads during this period, and others will not. Take a look at the StockTable1 page to get some ideas on how ETFs can be profitable. Listed below are favorable conditions for a good fall and winter in stocks.
1. The Federal interest rates are still near zero, and they are expected to stay that way for a while. An old saying is that stocks will die when interest is high, and stocks will grow when interest is low.
2. Unemployment claims are staying at less than 400,000 each week. Until unemployment starts rising significantly stocks will be safe.
3. Fibonacci retracement levels are being held due to many investors and institutions who believe in buying stocks after pullbacks.
4. Constant infeed of new 401K money where investors seek the highest return.
5. Likely scenario that Congress and the President will compromise on budget issues just as they did in 2011 after a brief standoff.
6. The Federal Reserve is buying bonds or otherwise stimulating the economy.
7. Manufacturing statistics are staying okay.
8. Housing statistics are still good.
9. Rumors of war or a coming recession would need to be fairly strong to send stocks significantly lower if the economy is currently okay.
10. Earnings are improving.
Now, in order to make the most for your money during the best time of the year, I have listed several stocks below that you could buy each year for possible double-digit gains. Conditions will vary from year to year, though. For example, overseas shipping stocks might be in a slump during some periods. You may also want to watch the charts for the stocks below. I like to take profits when stocks fall below the 20-day exponential moving average. Other people use the 50-day moving average for determining when to sell.
Stock | Description |
BRK/B | Berkshire Hathaway -- Warren Buffett |
AI | Arlington Asset Investment Corp. |
TAL | TAL International -- Shipping containers |
SPY | S&P 500 ETF |
DIA | Dow Industrials ETF |
CVX | Chevron -- Oil and gas |
UDOW | Leveraged ETF for the Dow Industrials |
XIV | Inverse volatility ETF -- Betting on upward stocks. |