Chinese New Year – year of the goat

Today is the start of the Chinese new year.

The following chart plots the average performance of the stock market for each animal year since 1950. For example, Ox years started in 1961, 1973, 1985, 1997, 2009; and the average performance of the market in those (Chinese) years was +14.0%.

NB. The Chinese calendar is based on the lunar year cycle and so performance has been calculated for each lunar year – not the corresponding calendar year.
Chinese calendar and S&P 500 average annual returns (1950-2015)
The Chinese New Year starting this week is…the Year of the Goat – which has been the best Chinese lunar year animal for the stock market.

The Chinese calendar is therefore forecasting (if history is a guide) the market will increase 17.9% from 19 February 2015 to 7 February 2016.

Note: There is some confusion in the Chinese astrological calendar over whether this is the year of the goat, the sheep, or the ram. If it turns out that this is the year of the ram, then the above figures may not provide an accurate forecast for the market in the coming year.

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