WELLINGTON CAPITAL GROUP INSIGHTS: 2018 YEAR OF THE DOG
The best way to predict the future of investments and markets is through meticulous research and hard data analysis. Astrology, while silly to many, offers a fresh and fun perspective and Wellington Capital Group invites readers to take stock and look at the year ahead. The Chinese celestial system is also celebrated in Tokyo, having arrived in Japan during the 7th century, prior to the Nara period. According to the Chinese Lunar Calendar, we have just entered the Year of the Earth Dog and by all accounts it looks like a promising year.
Chinese Astrology dates back 5000 years, and is based on a 12 year cycle. The Dog is the 11th position in the 12 year cycle. Your personal sign is the year you were born, and the Animal of the Year has certain attributes that will influence both a person’s character and the general world. Legend says the Buddha summoned the animal kingdom to say goodbye before he died. 12 animals showed up and he honored each by naming a year after them. In China, stock market activity the first day after the Lunar New Year is the best indicator of market performance going forward, proven by data going back to 2006. This is a good reminder of the importance of starting out on the right foot (or paw, as the case may be)
DOG CHARACTERISTICS AND HOW THIS APPLIES TO INVESTING
According to tradition, people born in the Year of the Dog are loyal, sincere, intelligent and decisive. They are responsible and protective and don’t hide from difficulties. These describe the qualities one should look for in an investment advisor. They need to protect their clients’ assets and be available during difficult markets. Dogs are realistic and shrewd, so they are good at helping clients make decisions and stay focused on their long term goals.
The main weakness of this sign is that they tend to be conservative and risk averse. Every dog owner knows that they have a tendency to hide their toys and bury their bones. With respect to investing, the message here is that while it’s good to save, one does need to take some risk to achieve growth and stay ahead of inflation. In this aspect, a dog’s decisiveness is a benefit – they may be plodding savers but when an opportunity arises, they are effective decision makers and adept at sniffing out whether it’s a scam or a good investment.
During year of the dog, investors should remain level headed and err on the side of caution. Expect volatility as the dog jumps around. Stock markets may see a sharp drop in July, during the dog days of summer, with steady increases through November and January, ending the year on a high note. Transport and gaming companies will take a hit early in the year, and rebound in Q4. Avoid banking and financials altogether.