The Peak of the Decade Cycle

Today is the peak day in the decade cycle for stocks.

Let me be clear that I don’t put much faith in these things. I would never make an investment decision based on this. I just think it’s interesting for historic reasons.

Having said that, historically, the Dow has peaked on September 10 of the last year of a decade (years that end in 9).

After that, the Dow has fallen 22.3% to a low on June 27 of the third year of decade (ending in 2).

Stocks have continued to be negative until October 27 of the fifth year of the decade (years that end in 4). That’s slightly more than half the time. The stock market’s entire capital gain comes in the other half.

From June 27 of the third year until September 10 of the last year, the Dow has gained 188.9%. That’s a little over seven years.

The big weakness of this analysis is that it’s a small sample size. Sure, the Dow dates back to 1896, but that’s not that many decades to work with.

The average decade gain for the Dow is 124.4% (through the end of last year).

This is what the average decade has looked like for the Dow (set to 100 on January 1 of the first year).