Abstracts » Business

Pay attention to the past: here come the bears

Article Abstract:

Stock prices reflect past knowledge and hopes relating to the future performance of stocks, according to efficient market theorists, yet there are non-random patterns in stock prices. There is a correlation between stock price falls in October and bear markets, and stock prices are more likely to fall prior to a Budget. Large price falls in bear markets tend to occur when there is fear of recession, abnormal price shifts occur, and there are serious social of political problems. This means that any bear market occurring in 1998 may not be as bad as some bear markets in history.

Bear market

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December rises are a solid bet

Article Abstract:

UK stock markets tend to perform well in December which ranks third in terms of months producing a good performance for share prices. There are also links between the performance of shares in previous years and the december performance. Prices have tended to rise in Dec when they have risen during the previous year by over 9% with a further rise in Oct and Nov from 1% to 8%. The UK market may be affected by the Nov 1995 Budget, since budgets have previously been held at a different time of the year.

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The ice gets ever thinner

Article Abstract:

The biggest drop in share prices in the UK between 1950 and 1975 occurred from 1972 to 1974 with a drop in share prices of 73%. Eight bear markets have occurred since then, and they have sometimes finished before their presence was appreciated, so investors are advised to anticipate a bear market. Historical precendents point to a bear market starting in 1996, and the UK is also suffering from political uncertainties. Meanwhile US share prices are volatile on a daily basis.

History, Securities industry

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