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Originally Posted by justin
Not sure how much that chart is worth.*
Here's a chart summarizing monthly returns during the 2002-2006 period (based on the S&P500, not including dividends).* This period is not in the sample which produced the results above.* Radically different results.
I recall reading a research report from Vanguard saying essentially the same thing - historical results are moderately useful at predicting returns in sample, but when applied to out of sample periods, the historical results are not useful.*
Based on the first chart, you'd assume January was a dead ringer for high returns and that October and May weren't as hot.*
If you invested based on this assumption starting in 2002, you'd have been wrong.* You would have missed the good months and been invested in mediocre months.*
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Which is why I said 15 years- - -Show me some 15 year periods that look like your 5 year chart. It is also why I noted this==If the trailing 3 to 6 months are in line with the chart, the possibility is strong that the next month will follow suit.* If the numbers are off, all bets are off for the short term.
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