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Download Twibbon Halloween (Here)

Celebrate Halloween October 31th by buying motley fool stock advisor, crnt stock, jp morgan share price, gold investing, forex trading platform, etc. However, Halloween is a celebration observed in many countries on 31 October.

Halloween the eve of the Western Christian feast of All Hallows' Day. It begins the observance of Allhallowtide, the time in the liturgical year dedicated to remembering the dead, including saints (hallows), martyrs, and all the departed. Just Click DOWNLOAD, OPEN, or INSTALL.

Halloween Strategy for Buying Stock and Investment

The Halloween strategy, Halloween effect, or Halloween indicator is a market timing strategy based on the hypothesis that stocks perform better from Oct. 31 (Halloween) to May 1 than they do from the beginning of May through the end of October.

The strategy posits that it is prudent to buy stocks in November, hold them through the winter months, then sell in April, while investing in other asset classes from May through October.

Some who subscribe to this tactic say not to invest at all during the summer months. The idea that investors can time the market in this way is contrary to the buy-and-hold strategy, in which an investor may ride out down months, and invest for the longer term.

The superior results seem to contradict the premise of the efficient market hypothesis and that stocks behave in a completely random manner.

Halloween Effect to Market and Economy

No one has been able to conclusively identify a reason for this seasonal anomaly. While many market watchers believe that investment professionals’ summer vacations do have an impact on market liquidity.

Or that investors’ aversion to risk during the summer months is at least partly responsible for the difference in seasonal returns.

These notions assume that increased participation means increased gains. However, market crashes and similar investing disasters are attended by the highest levels in volume and participation.

Therefore, the assumption of increased participation may have some correlation with gains, but it is not likely to cause the gains.

Proximity to trading resources is not likely to be an explanation, either, as electronic trading allows investors all around the world to participate as easily from the beach as from the boardroom.

There is no dearth of theories to support whatever one wants to believe about the Halloween strategy. For as many different opinions as there are about the Halloween effect, there is an equal number of theories to support those opinions.

The Halloween strategy is fascinating for the very reason that it is both an empirical anomaly and a mystery.

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