Long-time members of The Independent Adviser for Vanguard Investors know that historically, when November rolls around on the calendar and the air begins to go from cool to cold, technology stocks start to heat up.

Looking back over many, many years, tech stocks have been fairly regularly outperforming the market over the four months from November through February. Now, I’ll grant you that this isn’t 100% certain. But it has come awfully close.

So, what is this Tech Winter thing?

It refers to the four-month period between the end of October and the end of February when tech stocks tend to outperform. Why this historical tech heat wave? Well, while it may seem strange that tech stocks follow a seasonal pattern, there are actually a number of factors I’ve found that can lead to this outperformance.

1. The first has to do with fourth quarter spending by corporations. Information technology managers tend to keep something back in their budgets during the course of the year, in case of an emergency or to spend on some technological innovation or product that becomes necessary for the company to stay competitive.

However, as the year draws to a close this unspent money needs to be used, because decision makers know that next year, come budget allocation time, if they have something left over they’re likely to see a reduction. So, rather than see their resources cut, they spend freely in the year’s final months. This sales surge is often noticed in the markets. And the tech stocks that benefit from this seasonal, year-end spending rise on expectations of increased earnings.

2. A second factor is Europe. European purchasers account for about 35% of U.S. technology orders, and during the fourth quarter they do a significant amount of buying. This happens year after year because of the longer summer vacations European companies give their workers, during which time orders slack off. When workers return, orders begin rising in the fall and through the winter, often hitting a peak in the last few months of the year.

3. Let’s add another factor: Discounts. Hardware companies, beginning to retool for new product launches, start offering discounts on existing inventory to speed sales. These discounts allow corporate purchasers looking for proven technology to buy the cheap, well-tested products still sitting on manufacturers’ shelves.

So, tech companies do well and tech stocks do well in advance of news in the early part of the following year that sales have, ahem, improved. Tech Winter draws to a close as technology companies restock their inventories after the start of the new year and a new purchasing cycle commences. As this happens, tech stocks don’t necessarily under-perform the stock market as a whole, but they do become less predictable in their movement, not following the historical pattern commonly seen between November and February.

Be sure to check out my other videos for more money making secrets and little-known facts on mutual fund investing. Or better yet, sign up for my monthly newsletter, The Independent Adviser for Vanguard Investors, where I help my subscribers make more than 94% more than the average Vanguard investor. And with my risk-free money-back guarantee, you have nothing to lose, but a ton to gain.

Click here now to get started with a risk-free trial subscription.

What Dan Wiener Knows About Vanguard Can Make You Rich

He’s been doing it for 17 years. And he’s doing it again this year. But this year, Dan wants you along for the ride.

Dan Wiener has been investigating mutual funds ever since the days when he was a financial journalist. For the last 17 years, he’s focused only on Vanguard.

Dan founded the Fund Family Shareholder Association (FFSA) and edits the association’s private members-only publication, The Independent Adviser for Vanguard Investors.

In his position as Editor, he is a four-time recipient of the Newsletter Publishers Foundation’s Editorial Excellence Award and has been mentioned in Barron’s, Bloomberg Personal and the Wall Street Journal just to name a few publications. Formerly, he was a financial columnist for U.S. News and World Report, and Fortune magazine.

Dan is entirely independent of The Vanguard Group, Inc. His only loyalty is to his readers, investors wise enough to secure their futures with Vanguard.

Dan’s two decades of work has made many a Vanguard investor richer than expected. Much richer! The evidence shows that Dan’s advice makes his readers 94% richer than the average Vanguard investor who invests with Vanguard on his own.

This is not a snapshot of selected “good” years. Dan beats the market, Vanguard and your own profit expectations year-in and year-out.

He achieves this by asking the tough questions at Vanguard — and publishing very, very hard-to-find information in his advisory, The Independent Adviser for Vanguard Investors, a monthly newsletter that keeps abreast of recent developments at Vanguard.

He doesn’t want you to miss out a moment longer.

Click here to get the Vanguard 94% advantage for yourself!

The Independent Adviser for Vanguard Investors provides independent investment advice on the Vanguard family of mutual funds.

Editor Dan Wiener, a long-time advocate of consumer investors, is dedicated to assisting Vanguard shareholders in achieving higher returns, less risk and more confidence in meeting their personal financial objectives.

The service gives members strictly independent and unbiased in-depth information on all of Vanguard’s stock and bond fund offerings, as well as their international funds, variable annuities and money markets.

Included in your service is a monthly newsletter with specific “buy,” “hold” and “sell” recommendations and performance returns for each of Vanguard’s funds.

The service also offers four different model portfolio plans (for conservative, moderate and aggressive investors) using only the finest Vanguard funds.

Dan also keeps you up-to-date on all Vanguard news events and changes in fund management. You will have access to fund manager interviews, fund distribution information, market updates, tax efficiency advice and many other tools to make you’re investing easier and more profitable.

All membership subscriptions entitle members to automatic enrollment in the Fund Family Shareholder Association at no additional charge. Members will also receive access to FFSA’s 24-hour Independent Adviser hotline.

Click here to learn more.