It’s a fact that some years of the Chinese zodiac are better than others for stock markets. And the Year of the Rooster is one of them. And as it happens, the rooster has in the past meant good things, for both Asian and US stock markets.
The graph below shows that the year of the rooster has been the best year for Asian markets, by far.
Past years of the rooster have averaged returns of 52 percent. That’s 19 percentage points higher than the next closest year, the year of the rabbit. And it’s well above the average return of 13 percent a year. (All returns are total returns, and include dividends.)
As shown below, US markets, as measured by the S&P 500, also do very well during the Chinese year of the rooster. The S&P 500 has averaged a total return of 14 percent. That strong performance is behind only the year of the tiger, and the year of the pig, and is tied with the year of the rabbit.
As shown above, both Asian and US markets should be avoided during the year of the snake – Asian markets have on average been flat, and the S&P 500 has only returned 1 percent on average. The next year of the snake will be 2025, so there’s no need to worry about it for a while.
There’s no scientific basis for the predictive powers of the Chinese zodiac. Just like there’s no basis for the January barometer, or the “sell in May and go away” trading rule (but they seem to work). And of course the past has no bearing on the present, but it can give investors some guidance.