Interesting question: October to February.
I've heard some market-wise people claim that buying in October and
selling in April will enable the investor to skim the best part of a
stock's appreciation while sitting on cash when the stock hits an
air-pocket. I don't have the figures for the entire market, but I
have tracked Microsoft, so I'll use the data I have available.
For Microsoft, last Friday of the month close, adjusted for splits:
February October Profit (Oct to Feb)
90 1.375 1.750
91 2.8331 3.7284 1.083
92 5.156 5.5469 1.4276
93 4.9844 5.0078 -0.5625
94 5.0625 7.7656 0.0055
95 7.6563 12.500 -0.11
96 12.9375 17.0547 0.4375
97 24.375 32.500 7.3203
98 42.375 52.9375 9.875
99 75.0625 ??? 22.125
As you can see, holding October to February, you'd enjoy 41.60
profit, where the buy-and-hold guy made 73.3125 with less commissions
and tax.
Please note that the trader's capital was at work (risk) for four
months per year (Nov,Dec,Jan,Feb) for $41, while the buy-and-hold's
capital was deployed for twelve months for $73. On a return-per-
month basis, the trader looks ahead.
Further, note that trading from 93 to 96 would have been very, very,
discouraging. The trader would most likely move to greener pastures
and would've not participated in the steep advances of Microsoft
since then. This was also a lean time for the buy-and-hold guy too.
Sorry I couldn't help much. Take your pick!
Cheers, PW.
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