It's that time of year where commentators start talking about whether there will be a Santa rally this year. The Santa rally is the name given to the end of year stock market rally. But like all the well known investment axioms there's a lack of analysis or hard facts surrounding the phenomenon. For example when does it usually start?
Well that largely depends on who you ask. But typically it refers to a rally in stock prices in the month of December, or sometimes specifically the trading days between Christmas and the second trading day of January. The reasons given for why it occurs include traders closing loss making trades for tax purposes (and then reinvesting) or just good all Christmas euphoria, but in truth nobody knows.
With the lack of real evidence out there I've analysed the last 21 years of movements in the stock market to see is there is any actual evidence of a Santa Rally.
Full article available exclusively to 80-20 Investor members.
To read the complete article, sign up for a free trial or log in below.
Start a free trial Already have an account? Log in
