If history is any guide, the start of September marks the single toughest week for global investors. That’s at least according to Stephen Eckett, editor of The UK Stock Market Almanac 2008. His calculations reveal that the 36th week of the year, which started yesterday, has the worst track record of the year for top U.K. companies’ share prices.
Since the FTSE 100 — an index of top 100 U.K. companies — first was compiled in 1984, the index has on average lost 1.1% of its value in Week 36, and has risen in just six of the past 23 years. And as integrated as global markets are in today’s world, what happens in a global financial center like London impacts markets everywhere.
Mr. Eckett can only guess at the reason: "It could be a combination of the end of the holidays and the evenings getting darker working together to depress the mood of investors, reducing their appetite for risk and thereby leading them to reduce equity exposure by selling stocks."
Whatever the explanation, let’s go with the historical odds and sit this week out. We’ll be back next week with another Global Bull Market Alert pick with big upside potential.
Given that this is historically the worst-performing market of the trading year, let’s take profits of 81.41% on our remaining POSCO options (PKXKG.X).
Overall, four out of our six positions are profitable — with POSCO (PKX) up 55.32% and Potash (POT) up 30.87% at or near record highs.
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