Various seasons have different impact on prices. See various charts on www.seasonalcharts.com
Oil is cheaper in the summer. Heating prices in the winter.
Dividend payments improve mood of people.
Before holidays, people are in better mood.
Here is the Graph of IBM. So now, understand why managers are so gloomy at the moment at IBM where I worked as a consultant.
But appart from the joke. Below is the real price chart of IBM for the last 1 year. In beginning of January trading just above 96.
Bond market changes opposite to shares. As months progress forwards intrest return is nearly lineary increases. And the price swings. Well, check the website.
Obviously, Bonds are best bought in May. Since bonds are opposite of shares. Poeple invest in bonds when they don't invest in shares. End of May is bad for the share market and you can see that in the Dow Jones seasonal avarage. This is where the saying comes "Sell in May and go away".
In fact, people who follow this strategy improve their result considerably according to statistics.
There are fundamental reason for patterns. Such as the end of year really. Starting from 12 th of Dec till 7th of Jan.
By the way, in Hungary the rally might end on mid of February on the day when the bear comes out from the cave to check if the winter has ended. I think the Hungarian market quite sensitive to bears. I wonder if this is a coincidence or people really think about this old story that every children in Hungary knows.
Now, let's see my favorite currencies.
JPY avarage from 1971-2004. EUR from 1971-2006.
WARNING: These seasonal charts must be incorrect!. Beginning of January should match up with end of December, there are way too big gaps in between. Another problem is that the website did not publish divergence data from avarage - without that information a mere avarage is quite useless as it can be just a random result nothing to do with patterns.
However, it is true that end of the year or certain quarter have impact on the companies as they must pay for the products they bought and they need to balance their books.
So according to this EUR should raise in the end of the year. Obviously, it did not work last year, as shown on the chart's left and worked during this year as shown in the right side.
Elections Cyecles in the US
During election years the stock market is weak (shouldn't it be strong???). And it is usually the srongs during pre-election.
TODO: check this data.
Bond markets are weak before an election (so this checks out, opposite of stocs).
Do Seasonal Patterns Change?
Yes. E.g. new technologies developed in agriculture.