Why does Schwab say the market does not have seasonal patterns?
Brokerage firms and mutual fund companies would have a tough time surviving if very many investors were aware of the market’s seasonality and moved their money to cash for six months every year. So they must go to whatever lengths they can to distort the information. Invariably in trying to refute the very clear proof of the market’s consistent seasonal patterns, these firms run their data from 1900, even though all of the research on seasonality shows the seasonal pattern did not begin to show up until 1950. The reason for that is simple. The seasonal pattern results from the extra chunks of money that flow into investors’ hands beginning in the fall, from distributions from mutual funds (most of which have fiscal years that end either September 31 or October 31), from Christmas and year-end bonuses, from profit-sharing bonuses, income tax refunds etc. Additionally, extra chunks of money flow automatically into the market at year end from employers’ contributions to their employees’ 4
