Thanks for pointing that out. Another good reason why I shouldn't be picking IOZ in the monthly tipping competition.
KH
IOZ - iShares CORE S&P/ASX 200 ETF
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KH
IOZ is an index-based ETF, with the aim of matching the return of XJO, the S&P ASX 200 index. So, when I write about XJO below, the same analysis can be applied to IOZ.
February:
XJO finished up 77.5 (1.11%) at 7049.1, beating the average percentage change for the last 4, 8 and 16 Februaries by some margin. Still, not enough for IOZ to win the February tipping competition, but in line with expectations.
The February result was really a good result, with many large companies going ex div during the month.
March:
March is usually a quiet month as far as XJO goes, the fall in March 2020 seems to be an outlier. However, we just can't remove one month from our numbers, so in it stays.
The average change for March over the past 16 years is 0.2%, while the average range over the same period is 7.8%, the highest of all the months. So, if past history is any guide, then hang on to your hats for a wild ride.
An alternate view would be that a Federal election is due, and markets are normally subdued during Federal election campaigns. However I'm one for ignoring the political effect on markets, and am sticking with my numbers.
In summing up, history tells us that although March is the most volatile of all the months, the monthly movement can be very small. As it was in February, it is the contrarian in me that is selecting IOZ to take part in the March volatility, but finish the ride at the top of the ferris wheel for a largish up month.
KH
February:
XJO finished up 77.5 (1.11%) at 7049.1, beating the average percentage change for the last 4, 8 and 16 Februaries by some margin. Still, not enough for IOZ to win the February tipping competition, but in line with expectations.
The February result was really a good result, with many large companies going ex div during the month.
March:
March is usually a quiet month as far as XJO goes, the fall in March 2020 seems to be an outlier. However, we just can't remove one month from our numbers, so in it stays.
The average change for March over the past 16 years is 0.2%, while the average range over the same period is 7.8%, the highest of all the months. So, if past history is any guide, then hang on to your hats for a wild ride.
An alternate view would be that a Federal election is due, and markets are normally subdued during Federal election campaigns. However I'm one for ignoring the political effect on markets, and am sticking with my numbers.
In summing up, history tells us that although March is the most volatile of all the months, the monthly movement can be very small. As it was in February, it is the contrarian in me that is selecting IOZ to take part in the March volatility, but finish the ride at the top of the ferris wheel for a largish up month.
KH
Feast your eyes on these little April numbers:
3.5% gain last year
4.6% average gain for the last four years
2.8% average gain for the last eight years
2.6% average gain for the last sixteen years
But wait, there's more!
# 2 rank for monthly gain during the last year
# 1 rank for average monthly gain for the past four years
# 1 rank for average monthly gain for the past eight years
# 1 rank for average monthly gain for the past sixteen years
April 2021 was #2 rank for the last 12 months only because of the fantastic 6.4% for the month just completed, March 2022.
Enough. I'm convinced. IOZ is my choice the April tipping competition!
KH
(p.s. The numbers are for XJO, the S&P ASX 200 index. My choice for tracking this index is IOZ, an index based ETF.)
3.5% gain last year
4.6% average gain for the last four years
2.8% average gain for the last eight years
2.6% average gain for the last sixteen years
But wait, there's more!
# 2 rank for monthly gain during the last year
# 1 rank for average monthly gain for the past four years
# 1 rank for average monthly gain for the past eight years
# 1 rank for average monthly gain for the past sixteen years
April 2021 was #2 rank for the last 12 months only because of the fantastic 6.4% for the month just completed, March 2022.
Enough. I'm convinced. IOZ is my choice the April tipping competition!
KH
(p.s. The numbers are for XJO, the S&P ASX 200 index. My choice for tracking this index is IOZ, an index based ETF.)
and, following on from the previous post, what a let-down April was. Even though the loss for April was relatively small (-0.51% for XJO), a far better result was expected.
One thing to note about April was that XJO's range for the month was 5.2%. Not high by historical standards, but still quite a large move. There was a time to be in stocks, and a time to be defensive.
Lets move on to May.
In recent years, May has been a good time to be in equities, with XJO up an average of 1.9% for the past 4 years. However, the further we go back in time, the worse the results become. Up just 0.8% on average for the past 8 years, and down 1.0% on average for the past 16 years.
Over the past 16 years, range for the month of May averages 6.5%. Just like April, I expect that, because of this large range, May will provide a very good buying opportunity at some time during the month.
Despite the poor start expected on Monday (SPI futures are down 1.1% as I write this), IOZ is still my choice for the May tipping competition. I figure that if I have a history of being a terrible stock picker, then I can do no worse than pick IOZ, which tracks the widely followed S&P / ASX 200 index (XJO).
KH
(p.s. The numbers are for XJO, the S&P ASX 200 index. My choice for tracking this index is IOZ, an index based ETF.)
One thing to note about April was that XJO's range for the month was 5.2%. Not high by historical standards, but still quite a large move. There was a time to be in stocks, and a time to be defensive.
Lets move on to May.
In recent years, May has been a good time to be in equities, with XJO up an average of 1.9% for the past 4 years. However, the further we go back in time, the worse the results become. Up just 0.8% on average for the past 8 years, and down 1.0% on average for the past 16 years.
Over the past 16 years, range for the month of May averages 6.5%. Just like April, I expect that, because of this large range, May will provide a very good buying opportunity at some time during the month.
Despite the poor start expected on Monday (SPI futures are down 1.1% as I write this), IOZ is still my choice for the May tipping competition. I figure that if I have a history of being a terrible stock picker, then I can do no worse than pick IOZ, which tracks the widely followed S&P / ASX 200 index (XJO).
KH
(p.s. The numbers are for XJO, the S&P ASX 200 index. My choice for tracking this index is IOZ, an index based ETF.)
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so you are betting against the traditional wisdom of selling in May , interesting ( of course that strategy might be relying on the excitement of company reports to peak the stock prices , rather than reduce the holdings to pay tax obligations )
but then i don't know if BEAR and BBOZ are allowed as tipping picks in the comp.
since you don't have confidence in your share selection ability , what about sector focused ETFs say an ETF that focuses heavily on banks in the bank reporting season ( at least the half yearly and yearly results ) or ETFs that embrace REITs or miners ( from time to time )
and give you some flexibility from month to month
but it is going to be an interesting month coming up , good luck
your historical data is interesting i always wondered how the index tracking funds performed long term , considering the tracked index is not a stable basket ( new stocks are included some stocks are taken-over or just tumble in market cap. )
but then i don't know if BEAR and BBOZ are allowed as tipping picks in the comp.
since you don't have confidence in your share selection ability , what about sector focused ETFs say an ETF that focuses heavily on banks in the bank reporting season ( at least the half yearly and yearly results ) or ETFs that embrace REITs or miners ( from time to time )
and give you some flexibility from month to month
but it is going to be an interesting month coming up , good luck
your historical data is interesting i always wondered how the index tracking funds performed long term , considering the tracked index is not a stable basket ( new stocks are included some stocks are taken-over or just tumble in market cap. )
No, not really.
They should be, because they are listed ETFs, just the same as many others. The difference between BEAR, BBOZ and IOZ is that IOZ is linked to the market index, and tracks it fairly closely. If you look at BEAR and BBOZ over time, they are supposed to be the reverse of the index, but they are not, most likely because of the time decay problem.
I'm picking IOZ because I know that this will give me a return approximately equal to that of the market. I have a few other things on my plate, and a not really interested in picking a small cap to win this competition. I know absolutely nothing about small cap stocks, my expertise lies elsewhere. So, for me, IOZ is the best bet.
It suits me, IOZ is usually in the top half of results for the month. You never know, one of these months large caps will come good again, and IOZ will be in the top three. At least I'm not running last.
KH
Besides, sell in May and go away is an outdated old wives' tale. Look at the recent stats for XJO:
2014: +0.62%
2015: -0.22%
2016: +2.41%
2017: -3.39%
2018: +0.49%
2019: +1.13%
2020: +4.23%
2021: +1.93%
2022: Your guess is as good as mine %
Sure, before 2014 there were some big down months, but that's back in the dark ages in investing terms. Most stock jockeys woudn't have been born then.
Six of the past eight Mays have been positive, all four of the past four Mays have been positive.
I like those stats.
KH
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i don't mind running last ( or in the bottom three ) as long as i get the selected stock at a good price ,
i don't limit myself to picking small caps , but a small cap ( which has some chance of paying divs ) is where i have had my best results . some have even climbed into the top 300 ( XKO )
and i would have to check back , but May has often been good to me , by presenting cheaper stocks that have disappointed with their results
good luck .. it looks like this will be a dramatic year
So, XJO was down 3.01% for the month of May. IOZ, an index based ETF based on XJO, was down from $30.50 to $29.70, or 2.62%. This result just shows that an index based ETF doesn't always follow the index upon which it is based.
Now for June.
June can be a funny month. In the short term, June has produced positive results for the index in general, and that has flowed through to IOZ. However in the longer term, June has been, on average, neutral or negative. So, I guess your guess is as good as mine.
I'm sticking with IOZ because, even though I reduced my position during May, it is still the largest position in my equity portfolio. Besides, there isn't anything else in which I would be happy holding a major position at this time in the long term equity cycle.
KH
Now for June.
June can be a funny month. In the short term, June has produced positive results for the index in general, and that has flowed through to IOZ. However in the longer term, June has been, on average, neutral or negative. So, I guess your guess is as good as mine.
I'm sticking with IOZ because, even though I reduced my position during May, it is still the largest position in my equity portfolio. Besides, there isn't anything else in which I would be happy holding a major position at this time in the long term equity cycle.
KH
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HUH ??
quirks like that have been wonderful for me ( but i do set a 'limit price ' )
cheers
Its going to be an interesting day on Tuesday, Aussie time. I usually don't make predictions ... but ... this isn't a prediction.
SPI futures were (if I am reading my charts right) 6933 on Friday at market close. Currently at 6673 (approx). Down approx 3.7%. In addition to that, IOZ was approx 2% above fair price on Friday at the close.
So, the SPI futures are telling me that IOZ will be down between about 5.5% and 7%, when trading opens on Tuesday, given the current market prices of the SPI.
weeeeeeeeeeeee!
KH
SPI futures were (if I am reading my charts right) 6933 on Friday at market close. Currently at 6673 (approx). Down approx 3.7%. In addition to that, IOZ was approx 2% above fair price on Friday at the close.
So, the SPI futures are telling me that IOZ will be down between about 5.5% and 7%, when trading opens on Tuesday, given the current market prices of the SPI.
weeeeeeeeeeeee!
KH
Sean K
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So, buying the dip?
Not yet, but maybe soon. I'd prefer price to be rising before I buy.
KH
I weakened ... bought some a little while ago. I'm a sucker for a good index based ETF.
KH
Sean K
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It's sort of tracking the overall XAO, of course. Off over 6% which is pretty significant for an ETF like this. Long term looks like a good opportunity. Around $26 ish should be a pause, just hard to see what's going to turn the market around in the short term.
2% of today's fall belongs to Friday. Someone overpaid in Friday's closing match.
You're right in saying that its hard to see what will turn the market in the short term, but I am also a believer in "no one knows where the market will go". I was 85% cash before today, so thought a little bit more in the market wouldn't break the bank, just in case the market turned around.
KH
Sean K
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Looks like we might be getting closer to those support levels around 26 bucks ish for long term proposition. Could overshoot while there's still blood gathering on the street of course.
Garpal Gumnut
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If you look out 3 years and do a Fibonnaci retracement $26 may be a bit optimistic.
It is not impossible for a 50% retracement or even a 62%.
On weekly volumes in IOZ holders are reluctant to panic until the last week of the fall.
So $25, $23 or even $20 if there is a full retracement to Covid panic is not impossible.
Most people seem to be holding their heads, presently.
gg
