Chapter 6. Seasonality and Cycles

Many seasonal and cyclical patterns are becoming less predictable.

The stock market, like many aspects of business and the economy, has long been subject to a host of cyclical influences. Compensation schedules, tax laws, specialized investment programs, asset allocation preferences, mutual fund practices, and budgeting processes have regularly affected the flow of funds into and out of the share-trading arena. Even mood swings and shifts in psychology, stimulated by such recurring factors as the changing seasons, have likely played a part, though the specific impact of those has been difficult to pin down. While destabilizing events—earthquakes, assassinations, terrorist attacks—have occasionally muddied ...

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