Early Retirement & Financial Independence Community - View Single Post - New Month- -Same Old Chart

MasterBlaster · 02-27-2006, 11:59 AM

I can understand the January effect as people pile in new money for IRAs and such. March doesn't do much as people scramble to pay taxes.

I don't quite understand the Septmember, October effect. Perhaps that also is a tax induced effect.

And it goes without saying, that these are average returns over a long period. The variance is huge and that your milage may vary.

When trying to match patterns to wildly varying numbers you'll likely find that the variance of your patern match estimate is larger than the differences in the numbers you'll base your decisions on. In other words and in my opinion any match or partial match is only a coincidence. I would not suggest that you deploy any "real" money based on a perceived pattern match.

02-27-2006, 11:59 AM	#3
MasterBlaster Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 1,919	I can understand the January effect as people pile in new money for IRAs and such. March doesn't do much as people scramble to pay taxes. I don't quite understand the Septmember, October effect. Perhaps that also is a tax induced effect. And it goes without saying, that these are average returns over a long period. The variance is huge and that your milage may vary. When trying to match patterns to wildly varying numbers you'll likely find that the variance of your patern match estimate is larger than the differences in the numbers you'll base your decisions on. In other words and in my opinion any match or partial match is only a coincidence. I would not suggest that you deploy any "real" money based on a perceived pattern match.