Wednesday, February 10, 2021

“Bulls make money, bears make money, and pigs get slaughtered.” Old Wall Street saying.

The Chinese New Year (often called the Lunar New Year) will kick off Friday, February 12, and with it will begin the Year of the Ox. Although we would never suggest investing based on the zodiac signs—it is important to note that the Year of the Ox has historically been quite strong for equities. Not to mention we are saying goodbye to the year of the Rat. Good riddance to the Rat, as the last two years of the Rat were 2008 and 2020, not the best years for many reasons!

Since the Chinese New Year typically starts between late-January and mid-February, we looked at the 12-month return of the S&P 500 Index starting at the end of January dating back to 1950. And wouldn’t you know it? The Year of the Ox has been up more than 13% on average (with a median advance of nearly 18%); suggesting bulls are smiling indeed!

View enlarged chart.

“The year of the Ox is the second of the 12 animal signs of the Chinese zodiac, and the Ox is considered a symbol of diligence, persistence, and honesty. Equity returns indeed are quite persistent during the Ox, as it is the third best return out of the 12 Zodiac signs,” explained LPL Chief Market Strategist Ryan Detrick.

The LPL Chart of the Day shows how all the 12 Zodiac signs have done historically, with the Goat, Tiger, and Ox as the best, while the Rooster and Snake have been the worst.

View enlarged chart.

We want to stress that no one should invest purely based on the zodiac signs. This relationship is random and the sample size is small. Still, here’s hoping that the Year of the Ox plays out well for the bulls once again!

Lastly, please watch our latest LPL Market Signals podcast, as we discuss improving economic trends and why we upgraded our economic and stock market forecasts.

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

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