Contact Us    855-RIA-PLAN (855-742-7526)

3 Things: February Disappointment, Fed & A 50-70% Decline?

By Lance Roberts | February 2, 2017

, 3 Things: February Disappointment, Fed & A 50-70% Decline?

February Bumps

With January now behind us, and as the luster of the election begins to fade, the question becomes what will the month of February bring. While it is impossible to predict outcomes with absolute certainly, we can look at historical precedents to discern the risk that we undertake as investors.

If we look at the month of February going back to 1960 we find that there is a slight bias to February ending positively 57% of the time.

, 3 Things: February Disappointment, Fed & A 50-70% Decline?

Unfortunately, the declines in losing months have wiped out the gains in the positive months leaving the average return for February almost a draw (+.01%)

, 3 Things: February Disappointment, Fed & A 50-70% Decline?

A look at daily price movements during the month, on average, reveal the 4th trading day of February through the 12th day provide the best opportunity to rebalance portfolio allocations and reduce overall portfolio risk.

, 3 Things: February Disappointment, Fed & A 50-70% Decline?

Currently, bullish exuberance is once again pushing extremely high levels. As noted yesterday:

Historically, the combination of excessive exuberance, complacency and extensions have not worked out well for investors in the short-term.

, 3 Things: February Disappointment, Fed & A 50-70% Decline?

Furthermore, Blake Morrow at Forex Analytix made an interesting point as well:

“We have been making higher highs and higher lows (the definition of an uptrend). However, the rate that the higher highs are happening is lower than that of the higher lows. From this, it follows that we may be developing an ascending wedge. Also, the apex is not as tight in price that I typically like for a reversal pattern.


Talk with an Advisor & Planner Today!

lance_sig

Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube
Customer Relationship Summary (Form CRS)

2017/02/02
> Back to All Posts