From Investopedia, “Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every year. Seasonality can affect different aspects of a business or economy based on the seasons, such as consumer spending, inventories, staffing and growth.”

That’s a bit dry, even for me. Another way to think of seasonality is that there are some months that are better for investment returns than others. Seasonality is present in individual stocks, sectors, sub-sectors and the broader markets. Each may have similar or wildly different seasonality characteristics. For this discussion I am focusing on the S&P 500 (SPX) over the last four market cycles. A market cycle is a five-year period. Seasonality data is available going back decades.

The Fed was a completely different animal in the 1970s. Notable bond trader Richard Stuttmeier wrote,

“It's a different world than in 1972. When I began my career as a bond trader at one of 12 primary dealers, Arthur Burns was the Fed chair. Fed policy at the time was much more direct, but considerably less transparent.

Policy changes were handled in secret, with tactics implemented through the Open Market Trading Desk of the New York Federal Reserve Bank, which bought and sold securities through primary dealers to achieve the desired federal funds rate.

Rate decisions weren't announced publicly after each meeting of the Federal Open Market Committee, so traders had to pay attention to the market. When the Fed bought securities, it increased the amount of money in the banking system, which tended to bring the rate down. And vice versa.”

Think about that as compared to how vocal the Fed is today. I like to think of these past years as the Fed’s good old days.