Looking for another bullish narrative?

Of course you are! Who isn’t?

The financial media, for one. They want bear narratives. Terminals sell, but not like fear.

And tabloid blogs for another. They want bear narratives too. You can’t teach talent (and when you’re a mountebank, you can’t keep it on the rare occasions you stumble across it) but can train ambulance chasers.

Most regular investors don’t actually need more bull narratives. Only the stupidest of simpletons doesn’t understand the indispensability of a “keep it simple, stupid” approach to managing a core portfolio. Show me someone who claims buy-and-hold indexing isn’t the most reliable path to solid long-term returns and the angel of Jack Bogle will arrive on a white ship to show you a moronic charlatan.

All that superfluous verbosity (and really, “superfluous” is itself superfluous when placed ahead of “verbosity”) to say you should always be cautiously bullish and long. At least on net. As tipped in “Between The Lines,” I’m leaning towards boycotting analysis which suggests otherwise because — for lack of a better way to put it — such analysis is injurious to readers’ financial and mental well-being.

Note I said cautiously bullish and long, on net. I’m certainly not suggesting a cavalier approach to markets. Nor am I suggesting “professionals” (whatever that even means) aren’t obliged to hedge. Vigilance is everywhere and always a virtue. But as with everything in life, there’s a fine line between vigilance and paranoia. You don’t want to be paranoid. Paranoia can be ruinous.

Most people aren’t paranoid, and most people are cautiously bullish and long, if nowhere else than in their retirement portfolios. That probably accounts for some of the fascination with bear tabloids and scary-sounding headlines: You already know what can, and almost surely will, go right. But you may not know what could go wrong, and it’s anyway fun to read about prospective market catastrophes just the same as it’s fun to watch a movie about the end of the world.

Anyway, here’s another (somewhat flimsy) reason to stay bullish: “June-August is the second strongest three-month period of the year for all years going back to 1928,” according to BofA’s long-serving technical strategist Stephen Suttmeier, who wisely paired his CMT with a CFA just in case “because lines” ever goes out of style as an explanation for the price action.

Specifically, US stocks rose 65% of the time over the June-August window looking back nearly a century, with an average return of 3.2%.

But wait! There’s more. The seasonal’s even stronger during year four of presidential cycles. On the off chance no one told you, 2024’s a year four.

As the figure above shows, the S&P rose three-quarters of the time from June-August for an average return of more than 7% in presidential election years looking back to 1928.

Suttmeier summed it up. “Presidential election years can see big summer rallies,” he wrote. “Don’t sell in May and go away.”

That’s comforting. We may need that 7% cushion in November when the ghost of John C. Calhoun shows up, cursing at the swan he’s riding for being the wrong color.