lsayre wrote:The FOMC … has met formally only about 150 times since June of 1997, and each meeting lasts two days. If you take away only the gains that the S&P 500 Index has made on specifically those 300 meeting days, you will find that the S&P 500 Index has not gained a single point since June of 1997 … Coincidence?
How long have you known about this, without telling the rest of us poor slobs?
It's a guaranteed get-rich scheme: buy just before every scheduled meeting, sell on day two, thereby locking in all the market gains and avoiding all losses. No more buy-and-hold for me, I don't care what the Bogleheads say.
P.S. Those trend lines on the chart are totally bogus, statistically. I could do a better least-squares regression on the back of a wet dinner napkin.
Here’s a more mundane explanation, even if we grant (I don't) the above claim (eliminating days) to be true. The market trend is what it is, but stock buyers tend to hold off when the Fed is meeting, until they find out what happens in the meeting. Then when there are no scary announcements from the Fed, they go ahead and buy what they were hoping to buy. I have seen that for myself, over and over and over, by reviewing an S&P chart over the course of a meeting day. It’s only common sense not to jump in the water until you see whether that fin is an upside-down surf board or a right-side-up shark. AND it works both ways -- often the market will drop after a meeting -- so it's not valid to eliminate meeting-day gains unless you also eliminate meeting-day losses.
You have heard the phrase before: Numbers don't lie but liars use numbers. Zerohedge is a perfect example.