The Chart above proves that going back to 1950 using the S&P 500; historically, the strongest quarter is the 4th quarter.

There is a Trend that usually happens every September through October in the markets of North America, Japan and Europe.

This stems back to the actual stock market that was created only when the Baby boomers started buying RRSPs and having pensions back in the 1980s.

Before this period, only 4% of the public was invested, vs 74% today.

So it was before the Baby Boomers entered the markets, all the policies and methods of investing were created and are now termed the Traditional way of investing. Which does not make anyone wealthy except the large Financial Institutions

So this trend was created back then and explained why markets dropped in September and October followed by the Traditional investment season called the Santa Claus rally.

Once you understand this trend that goes on at this time of year, you will never fear it again. Like you are doing right now.

“Buy in November and go away in May “if you look at the Chart above, you see this has happened to the S&P 500 over the last 69 years.

Here is how this happens: starting in May, the market peaks, and markets are up.

It’s summertime, time to put investing aside and concentrate on living.

So yes, all the big boys that manage your Pensions, Mutual funds and Corporations go on Vacation starting in June, and when the Traders follow suit, you now have fewer investors investing; therefore, volumes are lower, and volatility is much higher.

This scares the hell out of small investors that let emotions drive their investments, and mistakes happen.

As September arrives, traders and the big three Pension Funds, Mutual Funds and Corporations return to the game.

Suppose the market has not already dropped by August. In that case, a more significant correction will occur in SEPT/OCT because it is at this time that the Big Three look at their portfolios and sell the losers to raise cash for the “Buy in November go away in May strategy.”

Yes, the market going down at this time of year is a strategy used by the big three.

So as the market heads into November, the Big Three have all this cash to invest because they knew that when they sold their losers, the general public would also sell their good stocks.

So the big three will buy all those good stocks up in November and make money on your emotional mistakes.

There will be a lot of good stocks to buy because of the small investors’ panic.

That’s when WARREN BUFFETT and the astute investors go fishing.

Then, the markets start to recover and build momentum.

Next comes the Santa Clause rally that drives the stock up even more as the small investors jump in on the markets, attracted by the market’s positive run in November

Typically, this brings the next quarter in line, and you have the January effect. Everyone is thinking positively again as they buy their RRSPs to save on Taxes.

Money comes in so fast that it’s still being invested up to, you guessed it, in May.

And now you know.

For anyone wishing to receive a free copy of my “connecting the dots strategy results” that covered 20 years of an average return of 20%, drop me a line, and I will email it to you.