Yesterday was the Chinese New Year, and with it comes the year of the Monkey. There are 12 animals in the Chinese zodiac, as it is based on a 12-year cycle. Take note that the Chinese New Year starts anywhere from mid-January to mid-February and is based on the lunar calendar.
Just as the Super Bowl Indicator is popular and maintains a nice track record in its relation to the Dow Jones Industrial Average, the Chinese Zodiac animals also another popular concept to watch, as it relates to the S&P 500 Index. It is worth pointing out there is absolutely no correlation between either Super Bowl winners or Chinese Zodiac animals with future equity performance, but they are both widely popular nonetheless.
The cycle of the animals is: Rat, Ox, Tiger, Hare, Dragon, Snake, Horse, Sheep, Monkey, Rooster, Dog, and Pig. Given that the Chinese New Year starts later in the calendar year, we broke things down from the end of January to the end of the next January. Looking specifically at the Year of the Monkey, starting in 1936 (which started a new zodiac cycle with the Rat), the year of the Monkey has never been negative; it is up six of six times.
Year of the Monkey Has Been Positive Six Times in a Row
S&P 500 Performance During Year of the Monkey
Source: LPL Research, FactSet 02/09/16
The performance data presented represent past performance and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
Since 1936, the average S&P 500 performance from the end of January until the end of the following January is 7.7% and it is higher 71% of the time. Lastly, here is the S&P 500 during each of the Chinese Zodiac animals.
Historically, the Year of the Monkey Maintains the Best Track Record for S&P 500 Performance
S&P 500 Performance During Chinese Zodiac Animals Since 1936
Source: LPL Research, FactSet 02/09/16
The performance data presented represent past performance and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.
Past performance is no guarantee of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
Stock investing involves risk including loss of principal.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services. The Dow Jones industrial averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore, their component weightings are affected only by changes in the stocks’ prices.
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