Information Without Meaning

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December has historically been a good time to own stocks. Over the last 91 years, the S&P 500 has averaged a 1.7% return, compared to a 0.9% gain for all other months, not an insignificant spread. So what do we do with this information?

2017 is the twenty-seventh time that the S&P 500 has been up 20% through November. In the previous 26 instances, December has gone on to average an even stronger 1.95% return. So what do we do with this information?

Below are each of the 91 returns for the month of December. Yes, the average has been solid, but there were also plenty of lousy months in the sample. So what do we do with this information?

Statistics like this make for a moderately acceptable blog post, but it’s numbers without meaning. The idea that non-material, public information will somehow help you in any way shape or form is beyond ludicrous. But even if we knew December’s return today, that we would experience another “average” month, what would you do with this information?

 

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