What happens in the month of December?
The answer is best described as “Christmas motivations”. You see it in the marketing, you get a sense in offices that things will be winding down soon, and you get a huge anticipation of the one or two week break at the end of the year where people can finally relax for a little bit before starting the new year.
In terms of market movement, I cannot think of a December that involved significant movement. Perhaps some market historians out there can put some numbers to this statement.
One movement, however, that is caused by the December year-end is typical “window dressing” (i.e. fund managers that want to make their holdings make them look like geniuses) and tax loss selling. Stocks that are below their average trading prices throughout the year should have somewhat more supply pressure, so this is always something to look out for – especially in less liquid issues.
I have been continually doing some research on candidates, but am not finding too much and find the allure of cash to be high. It is difficult having such a high cash position and watching a day like today when the major indexes go up over 2%, but I will not be lured into deploying my reserves when I am already 75% invested. In any respect, my portfolio has such little correlation to the major indexes that it becomes a non-factor.
Being patient is boring, but boring allows me to sleep at night and gives me the luxury of stalking other investment opportunities, as sparse as they may be.