Stock market: This year, beware the Ides of December …

The stock market usually does well in December: gaining ground in 75% of Decembers since 1928 while earning a 1.5% average monthly return … second best of the 12 months .

But , as we’ve harped before …

Capital gains taxes are scheduled to rise at the start of 2013 from a 15% rate to 23.8% (20% plus a 3.8% tax associated with ObamaCare.


According to Goldman Sachs:

The nearly 9 pp hike in capital gains taxes is similar in magnitude to the 9 pp rise in 1970 and the 8 pp rise in 1987.

In both prior cases S&P 500 posted negative returns in December as investors locked-in the lower tax rate.

The S&P 500 fell by 1.9% in December 1969 and 2.8% in December 1986.

Merry Christmas!

* * * * *

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s