Statistics obviate the slogan: As the New Year begins, it will go to the end

It is tempting to guess what the performance of the shares will be throughout the year according to their first trading day for the new year. Such an assumption, however, is naive and lacks a proper justification.

Shortly after the start of the first US session of the year, the S & P500 dropped 1.6%, briefly threatening to make the worst of today's first opening for 2001. Since 1982, the initial growth or loss of US shares have coincided with the overall direction for the year in only 50% of cases.

Last year was the first tangible collapse in the 2008 stock, especially after the worst economic data for China, which was only in addition to the overall concerns of investors for the world economy. The S & P500 almost invaded the sword territory in December following the uncertainty surrounding the trade negotiations and the ongoing tightening policy on the part of the Fed.

"The initial mood of the market is shaping up, but as an investor, you must be prepared for any change." - says Robert Pavlik, chief investment strategist at SlateStone Wealth.

Indications from the first few trading sessions of the year as a precursor to the annual performance can be traced back to 2008, when stocks fell by 1.4%, 2.5% and 1.8% on the first, third and fifth day of the year. The S & P500 fell 38% over the next 12 months, recording its worst annual performance since 1937.

But the presentation over a year is not only decisive for the ultimate strategy. The S & P500 met 1932 and 2001 with 6.9% and 2.8% down respectively, with depreciation continuing throughout the 12 months. However, the following major collapses from 1.6% to 2% in 1949, 1980 and 1983 were followed by strong rallies in the remaining months of those years.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

Read more:

• Risk off after the escalation in the Middle East, markets are recovering in a period of calm
• The macroeconomic events for today’s trading calendar
• The US government has confirmed the attacks, Trump is calling an emergency staff meeting
• Has the war between Iran and the US started?
• US markets remain under pressure, traders await Iran’s response