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The UK Stock Market Almanac 2016: Seasonality analysis and studies of market anomalies to give you an edge in the year ahead by Stephen Eckett

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An average year

What does an average year for the FTSE 100 look like?

The monthly summary pages in the diary section carry charts that show the average cumulative behaviour of the market day-by-day. These charts are produced by calculating the daily mean return for each day in the trading year over a specific period (in this case from 1984).

For example, if we take the index returns on the first trading of January for the 29 years since 1985, we can calculate the average return to be 0.38%. With this we can say that on average the FTSE 100 increased 0.38% on the first trading day of January over the period 1985-2015. We can repeat this process for the second trading day of January, and the third, etc., until we have a set of average returns ...

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