We meandered over to seasonalcharts.com, looked at all the available seasonal charts for common stocks, and noted the periods during which various stocks seem to make their upward moves.  Obviously, there's an element of subjectivity in this chart-watching exercise, but we think you'd agree that we did a fair job of picking out the periods where seasonal bullishness has predominated for various stocks.  All the charts are current as of late 2000 (it seems these guys have given up on updating their charts), meaning that we could backtest the strategy of buying these stocks in their historically strong periods in 2001, 2002, and 2003, without having to generate these "outdated" charts for ourselves.

Below are the results of the test.  The numbers are percentage gains and losses.  We also show the performance of the market (as measured by the Russell 3000) during the periods examined.  If a stock outperformed the market, you see a green cell.  Losers get a red cell.

Below we count 98 green cells and 78 red cells...the "seasonal stocks" outperformed 56% of the time.  The result is not overwhelming, but then again, the odds of this occurrence happening purely by chance is about 6%.  The average "seasonal stock" outperformed the market by about 2% during its holding period (which, depending on the stock, ranged from 1 to 6 months), though a handful of stocks influenced this result greatly (AT&T and Cisco with monster gains, and ADC Communications with a fat loss).

Any number of objections could be raised:  

• the risk-adjusted stock results should be compared to the risk-adjusted market results, since volatile stocks tend to outperform/underperform in bull/bear markets.  Note, however, that the market performed rather weakly over the period  2001-2004...one would expect volatile stocks to underperform...yet our selection of stocks outperformed.

• Another objection would be our selection of the Russell 3000, a broad index, as the index for comparison, when all of the stocks below are large caps and should behave as such.  

• our holding periods are not evenly distributed throughout the year...a lot of stocks are held in certain months, whereas relatively few are held in other months.  

As is often the case on our website, we're more interested in running quick studies that might point the way to further investigation than preparing for a dissertation.  Our verdict:  it would be worthwhile to continue to look at this approach to seasonal investing.  We'll be doing just that with our "seasonal charts portfolio", a portfolio that will attempt to stay fully, or near-fully, invested in "seasonal stocks" at all times.

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