As most people know, Oak Wealth Advisors does not invest based on predictions.  Instead, we focus on disciplined investing which leads to greater stability and wealth creation.  We also try to keep our clients well informed and want them to be confident that we are aware of important data that may impact their investments.  The list below provides fifteen nuggets of information that may influence the investment markets in 2015.  At a minimum, they will provide you with a full elevator ride worth of financial trivia to share with your friends and colleagues.

  1. The S&P 500 large company stock index has risen over 200% since its recent low on March 9, 2009 at the bottom of the recession.
  2. Since 2008, individual investors have, on average, been pulling money OUT of the stock market while institutional investors have, on average, been adding to their stock market holdings. In essence, the individual investors have been selling to the institutional investors as the market has been rising.
  3. The “January Effect” suggests that the stock market’s performance in January foretells the performance of the stock market for the year. In January, the S&P 500 index was down three percent. The January Effect has been accurate 87.7% of the time.
  4. The “Super Bowl Effect” suggests that if the NFC team wins the Super Bowl, the stock market will have a positive return for the year and the return for the year will be negative if the AFC team wins. The Patriots won the 2015 Super Bowl so the suggestion is that we will have a negative year for the stock market. The Super Bowl Effect has been accurate 80% of the time.
  5. The third year of a Presidential term is positive for the stock market 88% of the time. This is the third year of President Obama’s second term. The average gain for the S&P 500 during these years has been 16%.
  6. The twelve-month period beginning with the month before a mid-term election (October 2014) has been positive for the stock market over each of the last seventeen periods. The average return for the S&P 500 over these periods has been 17.5%.
  7. At the start of the year, most all of the historical valuation measures for the stock market suggested that the market was fully valued to slightly over-valued.
  8. The dollar’s relative purchasing power compared to foreign currencies rose at the end of last year and is expected to stay strong throughout 2015. This situation makes foreign goods and services cheaper for American consumers and American goods and services more expensive for foreigners to purchase. The implication is that foreign stocks should benefit at the expense of U.S. stocks due to the stronger U.S. dollar.
  9. The current bull market for stocks is completing its sixth year. The average length of bull markets for stocks since 1940 has been between four and four-and-a-half years.
  10. In all six years of the current bull market, the S&P 500 has had intra-year declines of at least 6%.
  11. The price of a barrel of oil at the end of January is less than half of the price it commanded from 2010 through mid-2014.
  12. The interest rate yield curve is much flatter (that is, the difference between long-term bond interest rates and short-term bond interest rates is minimal) than it was last year which means that investors will not be rewarded with higher yields for taking greater risk investing in longer-term bonds.
  13. Historically low interest rates can go lower, as occurred in January.
  14. Real Estate Investment Trusts (REITs) have been the best performing asset class among equity investments in four of the past five years.
  15. The Chicago Cubs should win more games in 2015 than they did in 2014. However, they will still win fewer games than the St. Louis Cardinals. Okay, I’ll admit this has nothing to do with the investment markets but if you have read this far, you deserve a break from all the financial details.

This update is intended for the use of Oak Wealth Advisors LLC clients. This update should not be viewed as personalized investment or financial planning advice from Oak Wealth Advisors LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to their individual situation, they are encouraged to consult Oak Wealth Advisors LLC. Past performance does not guarantee future results and all investments should be scrutinized before being implemented in a portfolio.