A Potential Way to Triple Returns in a Sideways Aussie Market

Did a black cat cross your path this morning before you walked under a ladder and into a mirror?

Why people fear Friday the 13th I’ll never truly understand. But it is said to originate in medieval times, associating bad luck with the 13 people attending the Last Supper.

Funnily enough, Friday is the most common weekday for a 13th of a month to occur in the Gregorian calendar — the most widely used calendar in the world.

But investors need not fear because Friday the 13th has been kind to the market historically.

Friday the 13th Stock Performance 13-10-17

Source: Business Insider
[Click to enlarge]

Business Insider looked at the performance of the S&P 500 going back to 1950. It turns out that trading days on Friday the 13th tend to close a smidgen higher than other days closing in the black.

Superstitions aside, all eyes are on the US market this month.

US stocks have been on a tear since the start of the year, with the S&P 500 and Dow Jones up 14.31% and 15.74% respectively. This is in stark contrast with the Aussie market, with the S&P/ASX 200 up a paltry 2.21%. I think my bank account has a higher interest rate than that!

There are ways to make much bigger gains in the Aussie market. I’ll show you how shortly.

Throughout most of the year, there’s been a question nagging market-lifers: When will she blow?

Head of debt capital markets for MUFG Anthony Barklam recently wrote that anyone who’s been in this business for the past three decades ‘knows’ that years ending in ‘7’ are fatal for global financial markets:

1987 saw the original “Black Monday” stock market crash. That day, the Dow Jones Industrial Average fell by 22.6 per cent, a one-day percentage decline that hasn’t been seen since. 1997 heralded the Asian financial crisis, a contagious period of devalued currencies, stock markets and asset prices. 2007, meanwhile, is etched in everyone’s mind as the beginning of the global financial crisis, the worst of its kind since the Great Depression.

However, what Barklam describes isn’t just a three-decade trend.

It’s important to note that the stock market has crashed every year that ends in a seven since 1897. That’s right. This is actually a century-long market trend.

Although, the past three ‘Year Seven’ crashes all occurred in October. Meaning we have 19 days left to see if history repeats. 

While there are still incredible problems filtering through the global economy — all brought on by excessive amounts of debt and endless money-printing — sitting here and rooting for the crash this month isn’t productive.

In fact, US President Donald Trump’s recent 1,500 tax reforms proposal may be the shiny object that distracts us from this trend and the potential for an October crash.

But what if the Dow rallies? It’s entirely possible. Crossing through the never-before-seen 23,000-point threshold could have a euphoric effect on the broader US market, and to a lesser extent global markets.

Of course, it could also be the fear of missing out that is driving investors.

Which is absolutely nothing like the broader Aussie market. As I said, the XJO is up a tiny 2.21% for the year. No one is calling for the Aussie market to crash.

Aside from peaking at a year-to-date high of 5956.40 points at the very start of May, the XJO has been stuck in a frustrating trading range of 5611–5794 points. This 180-odd point range may seem large, but it is in fact tiny and restrictive. And largely made up of price swings between the Aussie banks and the mining giants.

Chasing paltry gains in mining and bank stocks isn’t every investor’s idea of fun. With the Aussie market stuck in a sideways pattern, you need to step out of the box and look at new ways to grow your wealth.

Over at Total Income, editor Matt Hibbard has done just that. Rather than merely recommend high-yielding stocks for dividends, Matt scours the market and looks for highly-profitable companies that are part of growth industries in Australia. He told subscribers last month:

Rather than chase growth, we find the best investments to grow your wealth and income over time. Not only that, by selecting high quality stocks that focus on returning profits to investors, Matt has been able to triple some of his returns for investors.

He does this by analysing sectors of the Aussie market that many investors overlook. Matt’s most recent recommendation focused on a company that is poised to potentially rally over the next decade as this key Australian export almost doubles in value in the same time.

Want to learn more? Click here.

Kind regards,

Shae Russell,
Editor, Markets & Money

Shae Russell started out in financial markets more than a decade ago. Working with a derivative brokering firm, she helped clients understand derivative markets, as well as teaching them the basics of technical analysis. Since joining Port Phillip Publishing eight years ago, Shae has worked across a number of publications. She holds the record for the highest-returning stock recommendation, in which a microcap stock returned over 1,200% in six months. Ask her about it, and she won’t stop yapping on. For the past two years, Shae has worked alongside Jim Rickards as his Australian analyst, translating global macro trends for Aussie investors, and how they can take advantage of these trends. Drawing on her extensive experience, Shae is the lead editor of Markets & Money. Each day, Shae looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

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