Probability Based Investing

Probability Based Investing

Probability Based Investing strategies look at the probability that markets will move up or down based on how they have historically responded to historical events.

Examples:

  • Since 1950, stocks have rallied in the year following midterm elections every single time
  • Stocks tend to rally the week of thanksgiving (when many traders are away on vacation and volume is light)
  • Markets do well in years where congress is split (different parties control the house and senate)