Alpha Power Investing Newsletter

June 8, 2017

The History of the Mid-Cap Power Zone

May 31st marked the end of the latest "Power Zone" period that we use in managing the Alpha Mid-Cap Power Index strategy. In this issue we want to take a look back at the history of the Power Zone and why it is so useful to investors.
The Power Zone begins at the close on the last trading day of October and extends through the close on the last trading day of the following May. Our research - and that of many others - strongly suggests that this is a favorable period for stock market investors. In addition, our research has revealed that the S&P MidCap 400 Index has historically been the best index to invest in during this seasonally favorable period.
This month we want to take a look back at Power Zone history and highlight the powerful performance of the S&P Midcap 400 Index not only on a standalone basis, but also relative to the performance of the more commonly followed S&P 500 Index.
Figure 1 displays the year-by-year performance of the S&P MidCap 400 Index and the S&P 500 Index during the Power Zone (November 1 - May 31) since 1982.
In the S&P MidCap 400 column in Figure 1, note that the Power Zone period has only experienced four losses, while posting a gain during 32 of the last 36 years. Figure 2 displays some of the performance highlights for the various indexes as well as the performance of the S&P MidCap 400 index versus the S&P 500 Index during the Power Zone.
Things to note regarding the performance of the S&P MidCap 400 Index during the Power Zone:
  • Midcaps have registered a gain 89% of the time during the Power Zone.
  • The average gain for Midcaps is +13.3% and the median gain is +13.6%.
  • Midcaps have outperformed the S&P 500 Index in 24 of the past 36 Power Zones (67% of the time).
Year-to-year performance can vary greatly and profits are never guaranteed regardless of how strong any particular seasonal trend may be. Still, the historical numbers presented in this issue should instill renewed confidence as they reaffirm once again that the Alpha Mid-Cap Power Index strategy is built on a strong foundation. The keys to long-term success then rest with our ongoing commitment to follow the strategy, as detailed in our brochure, without exception, and for investors to remain committed to the strategy over a long period of time.
To learn more about our strategies, go to the Strategies and Performance page of our website at to read the brochures and fact sheets.

Jay Kaeppel
Vice President and Director of Research
Alpha Investment Management, Inc.

Disclosures: Past performance is not a guarantee of future performance. Indexes are not investment vehicles. The returns illustrated above are not returns of any Alpha strategy and do not include management fees or the cost of funds, trading, or other expenses. To see the impact of these costs, please refer to the net of fees and expenses performance data for specific Alpha strategies. The illustrations above are designed to quantify the effect of certain time periods on representative market indexes.

Alpha Investment Management, Inc. is an SEC registered investment advisor. Such registration does not imply a certain skill or training and no inference to the contrary should be made. The information and opinions expressed in this document are for informational purposes only. Any recommendation or opinion made in this document may not be suitable for all investors. The information contained herein does not constitute and should not be construed as investment advice, an offering of investment advisory services, or an offer to sell or a solicitation to buy any security.

© 2017 Alpha Investment Management, Inc.

Alpha Power Investing Newsletter Archives