A friend of mine recently asked if I went long on the FTSE for a month each December? I looked at him a little strangely thinking, what a silly question (and what’s the story with that shirt). Why, with the markets ramping down for the holidays and many investors taking defensive positions before hitting the slopes, would I put my hard earned on an outcome that goes against all my prevailing investment logic (pardon the oxymoron).
Sure, there’s a case for Christmas spending buoying the retail and manufacturing sectors and I guess there’s a merry optimism to the population come December but I never would have imagined the FTSE to be anything more than a 50-50 play for the month of December.
But my friend’s a fairly astute sort of operator – albeit with questionable dress sense – and there was one surefire way to get to the bottom of this, so I vowed to take a little look at the data.
And here’s what I came up with for opening and closing December FTSE figures since 2003.
|28th Nov 2003 4342.60 to||31st Dec 2003 4476.90||– Finished December up 134.30 points|
|30th Nov 2004 4703.20 to||31st Dec 2004 4814.30||– Finished December up 111.10 points|
|30th Nov 2005 5423.20 to||30th Dec 2005 5618.80||– Finished December up 195.60 points|
|30th Nov 2006 6048.80 to||29th Dec 2006 6220.80||– Finished December up 172.00 points|
|30th Nov 2007 6432.50 to||31st Dec 2007 6456.90||– Finished December up 24.40 points|
|28th Nov 2008 4288.00 to||31st Dec 2008 4434.20||– Finished December up 146.20 points|
|30th Nov 2009 5190.70 to||31st Dec 2009 5412.90||– Finished December up 222.20 points|
|30th Nov 2010 5528.30 to||31st Dec 2010 5899.90||– Finished December up 371.60 points|
|30th Nov 2011 5505.40 to||30th Dec 2011 5572.28||– Finished December up 66.88 points|
That’s nine years in a row that the FTSE 100 has finished December higher than it began.
So if you’d gone long on the FTSE for say, a quid a point every December from 2003 through 2011, you’d have netted youself a handy £1,444.28 by the end of last year – that’s before accounting for the spread and any associated costs on the negative, and inflation on the positive.
But that’s not to say that 2012 will follow the trend – hindsight and Yahoo financial data is a wonderful thing – but for the first time in a long time I’ve had a little flutter on the FTSE, so we’ll see what happens.
If spread-betting’s not your thing, perhaps binary options betting is? With binary options betting you’d bet a set amount on the outcome of the FTSE being higher at the end of December than it was at the beginning. Simples. Unlike spread trading your locked in for a set figure profit – and more importantly, loss – based on the outcome. For more on binary options betting take a look at BinaryOptions.com
I’ll be back with an update on our indice play in early January – as I type we’re 30 points to the good. Who knows, if I’m looking good for a profit come Christmas eve, I may even splash out on a new shirt for my mate.
Thanks again for dropping by.
Looking for investment advice? I'm afraid this isn't it. Please read our disclaimer.