The stock market can move sideways too

From 1927 to 1949,

the stock market went 

sideways for 22 years.

From 1965 high 

to the 1982 low,

the stock market  went

sideways for 17 years.

There was a lot of

inflation in that

period, so the 

purchasing power

of the invested funds

went down -75% !

From the 2000 

valuation peak, 

to 2012,

the stock market 

went sideways.

If you bought 

stocks when 

valuations

were high, 

such as in

August 2000, 

and patiently 

waited until

valuations

were high again,

in January 2020,

your annual 

return was 5.75%,

for the19 year and

5 month period,

assuming you 

invested in the

Vanguard 

S&P500

index fund 

(VFINX).

If the market 

is highly valued,

as it is now, 

the expected

return over 

the next 

10 years

is very low.

But there are 

still some 

opportunities

for trading 

seasonal 

trends.

For example,

stocks do best

from November

through April,

compared with

May though

October,

for the simple 

reason that 

investors (mainly

the top 10% in 

income) receive 

bonus and profit 

sharing checks 

in those months.

Those lump sums

are not needed

for regular monthly

bills.

In the US, from 

1949 through 2019,

the Dow Industrials

gained only 

+34% TOTAL, 

when held

only from May

through October 

of each year, 

during that 

70-year period.

period !

That seasonality

pattern happens 

in nearly all nations

with stock 

markets.

In the US, the 

S&P midcap 400

index does 

especially well,

and the favorable

seasonality 

often extends

to the end of May,

rather than May 1

(seven months).

For foreign stocks,

it's November 

to May 1, but the

month of July

tends to be bullish

too.