Buy in May for Another 7%, from Kim Zussman
In 2013, stock market return for January - April is about 12% (SPY: Dec 31 - end of april). Going back to 1994, regressed subsequent May- October returns against return of prior Jan-Aprils shows a positive correlation:
Regression Analysis: May-Oct versus Jan-Apr
The regression equation is
May-Oct = - 0.0107 + 0.753 Jan-Apr
Predictor Coef SE Coef T P
Constant -0.01071 0.03092 -0.35 0.733
Jan-Apr 0.7530 0.4125 1.83 0.086
S = 0.115422 R-Sq = 16.4% R-Sq(adj) = 11.5%
Though not quite significant, in the absence of a miraculous recovery in economic activity (and unlikely FED tightening), the regression equation suggests another +7% through October.