The conventional wisdom is that stocks have an upward bias at the end of each quarter.
The usual suspect? A last-ditch mini-buying spree by fund managers looking to temporarily boost the value of equity portfolios -- and their calculated returns -- as the three-month reporting period comes to an end.
However, based on the trading pattern during the latter half of June over the past two decades, it would appear that the conventional wisdom might be something of an urban legend, at least with respect to the second quarter of the year.
During the period from 1986 through 2006, the S&P 500 index has been down 55% of the time, or 11 out of 20 occasions, from June 15th through June 30th. The median return over the span has been a loss of 0.44%.
Of course, this time around the stock market could end up doing well over the next two weeks, but history suggests that might not be the best way to play it.
Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.
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