S&P 500 % Change by Month, Correlation to US Dollar

I was a little curious today how the S&P performed by month over it’s history (1988-2014). It turns out the 4th quarter brought the most promising returns. However, it’s easy for outliers to distort the gains so I ended up looking at the number of times each month had a decline. Over the last 26 years, December was a losing month only 15% of the time while Q3 months had the most potential for downside.

With the looming interest rate hikes by the federal reserve, one must speculate it’s long term effect on US equities. Over the history of the S&P 500 and US Dollar Index, there exists a positive .39 correlation between the two. As foreign investment in US equities increase, the dollar benefits as US dollars are required to purchase US stocks. As long as interest rates and the dollar continue to rise, precious metals will continue to struggle. Optimism in US equities are reaching historic levels thus I’m implementing a more cautious investment plan for 2015.

Month % Chg Losing %
January 0.53% 37%
February 0.13% 37%
March 1.26% 33%
April 1.78% 26%
May 1.09% 30%
June -0.30% 44%
July 0.93% 52%
August -0.85% 41%
September -0.24% 48%
October 1.40% 33%
November 1.29% 36%
December 2.16% 15%

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