Latest Blog: Fireside Reading - 03/30/2023
-
-
CIO INSIGHTS
-
CIO INSIGHTS
-
BACK TO CIO INSIGHTS
BACK TO ARTICLES & INSIGHTS HOME
-
-
-
-
Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
IN A HOLE
Published: 03-04-2016Two months ago, I offered some hope that drop we saw on the first day of 2016 was a good omen for the rest of the month and year (http://blog.angelesadvisors.com/2016/01/apres-moi-le-deluge/). I noted that, of the 14 opening day declines since 1928, only 3 (1957, 1978, 2008) portended weak first months. And while 1957 and 2008 were down years for US equities, 1978 was positive. So there was hope (statistically).
Forget it. There are lies, damn lies, and statistics (as Mark Twain wrote), and this statistic certainly lied. US stocks lost 5% in January, with another fractional loss in February, making this the 17th worst start to a year since 1928. So what now? The table below provides the history.
The data say that when the first two months are down more than 5%, the next month is likely (58.8% of the time) to be up about 1% (median). That’s the good news. The rest of the year will likely be down, with a median return of -0.50% the rest of the year. There is only a 35% likelihood that 2016 can redeem itself with a positive return for the full year.
So the data suggest we crawl along for the rest of the year. Of course, the same data also said the opening day drop was likely a positive signal. But statistics is a funny thing: the fact that reality did not comply with its probability does not mean that the next observation will also fall outside expectations. At least, not necessarily, which is probably why Mark Twain had little time for them.
PRINT THIS ARTICLERELATED ARTICLES
-
Long Term 05-26-2015
In much of life, certainty dissipates with time. Weather forecasts are pretty accurate over the next 24 hours, a little ...
READ BLOG POST -
Job Growth is Falling. The Sky is Not. 06-02-2017
Today's jobs report was disappointing: only 138,000 net new jobs created in May (the consensus had it pegged at ...
READ BLOG POST -
Hope and Reality 04-06-2017
Why is everyone so happy? Well, maybe not everyone, but a lot of people are as optimistic as they've been in a long ...
READ BLOG POST
-
-
We strive build portfolios of best-in-class investment managers across all asset classes. If you would like to be considered for our portfolios, please contact us using our manager inquiries form.
- MANAGER INQUIRIES
-
SUBSCRIBE TO ANGELES' INSIGHTS
Get the latest investment information and stay on top of market trends.
-
CONTACT US
SANTA MONICA
429 SANTA MONICA BLVD,
SUITE 650
SANTA MONICA, CA 90401
310.393.6300
GET DIRECTIONS -
NEW YORK
375 PARK AVENUE,
SUITE 2209
NEW YORK, NY 10152
212.451.9240
GET DIRECTIONS -
CHICAGO
400 N. MICHIGAN AVE,
SUITE S1700
CHICAGO, IL 60611
312.212.6843
GET DIRECTIONS -
HOUSTON
5151 SAN FELIPE ST,
SUITE 1480
HOUSTON, TX 77056
713.832.3670
GET DIRECTIONS
How Can We Help You?
Institutional InvestorsFully resourced investment office built to manage sophisticated client investment programs
Private WealthPersonalized discretionary portfolio and wealth management services powered by institutional process
Investment ManagementRigorous process and a flexible platform designed to meet client needs
Articles & InsightsLatest insights and perspectives from the Angeles team
Contact UsGet in touch