First Focus on the First Day of the Month

In our articles earlier this year, we showed that the first trading day of the month gathers most of the gains for the year.  In 2010, trading only the 12 first days of the month would have captured 93.5% of the gain for the year on $SPX!  In fact, going back 20 years, trading on only the first day of the month would have captured 69% of the gain for $SPX over that time ($SPX had risen from 927 points since 12/31/1990 to 12/31/2010).  If you then add in the fact that you could have put your money in interest-bearing investments for the rest of the month (at least,
back when interest rates were above zero %), you would have outperformed $SPX over that time — by working only 1 day per month!

This year, the same is true again, as January 3rd saw the $SPX up 14.25, and February 1st saw $SPX rise by 21.47.  March 1st isn’t far away.

Lawrence G. McMillan is President of McMillan Analysis Corp.