In my Stock Return Forecast for November, I wrote: “The forecast for November is positive. November has very often been positive for the stock market. I predict a 70% chance that the TSX will end the month higher than 14,787.30.” And it did. It ended the month at 15,082.85, and I expect more growth in December.
Having said that, I’ve done more math and research. I expect the stock market to grow in three months out of five (60% of the time). I tried to find months where it’s more likely and months where it’s less likely to rise over the course of the month. No matter what I did (using backtesting), I was right about 60% of the time. Because of that, my forecasts are no better than buy-and-hold, both of which are right 60% of the time.