Don't be fearful, but stay cautious !
July - December returns for years ending in 7 have been dismal; Dana Lyons, a partner with J. Lyons Fund Management, recently noted that the performance of the stock market in the second half of years ending in 7s has been among the most dismal:
With the exception of 1927, it has literally been all downhill. In fact, "7" years have the worst July-December returns, reporting a median return of negative 9.29% (see diagram above).
"Other than the 1st half of year '0,' the median return of the 2nd half of year "7"s' is over 6% worse than any other half year," writes Lyons in a blog post.
The second half of "7" years also recorded the biggest drawdown for any six-month period, posting an average of 20.7%. Still, Lyons admits seasonality is a tricky thing and should only be relied on for minor "tweaks" in portfolios and positions. And no competent strategist would ever be caught giving credence to the belief that past performance is indicative of future results !