When to buy
People - Investing
Saturday, 21 April 2007 19:30

We all know that prices of shares and derivatives are highly unpredictable. People try to predict these prices using technical analysis and by gaining information about the companies they are shareholder of. Economists have theories dealing efficient markets claiming that all information relating to a security is already incorporated in the price. I believe that most markets are pretty efficient indeed.

On the other hand many studies have shown that in Autumn prices are substantially lower than in Spring, so prices depend highly on the time of the year. The explanation for this is that people are more optimistic in Spring than in Autumn.

To some extend money is driven by Nature: people go on vacation in Summer because in Summer it is too hot to work. People move house in Summer which consequence of the fact that most people are born in Spring and more people die in Winter than in Summer and therefore more people inherit in Spring than in other parts of the year. Finallly bonusses get paid in Summer and Spring. And yes, if most people are still born in Spring than that could be a reason that Nature makes us more optimistic in Spring than in other parts of the year.

Knowing that I always invest in the second half of October and November. I try to do most of my other spendings during the rest of the year.