The Halloween indicator is a variant of the stock market adage “Sell in May and go away,” the belief that the period from November to April has significantly stronger growth on average than the other months. In such strategies, stocks are sold at the start of May and the proceeds held in cash; stocks are bought again in the autumn, typically around Halloween. This Halloween indicator is partially related to another well known effect: The January Effect.
Presidential Cycle
As we discussed in the marketing timing strategies, we will spend more time to dig deeper into the Presidential Cycle.
The first year is the weakest of all four years. Higher returns during the last two years of a Presidential term than the first years. The expectation is that as a President takes office he begins to implement his proposals and investors, hunker down waiting to see the results. During the final two years the President becomes more concerned with his re-election and will ‘prime the pump’ in order to secure re-election.
January effect
As we discussed in the marketing timing strategies, January Effect is the oldest and more common accepted ideas. In this article, we expand the topic and look at more details.
When you are first hired to a new company, the human resource personnel would educate you that Employee Stock Purchase Plan (ESPP) is a fantastic deal etc. She would spend hours explaining how the 15% number would nest you a profit.
An ESPP typically works this way:
1. You contribute to the ESPP from x% of your salary. The contribution is taken out from your paycheck.
There are many different ways to predicate stock market. Some are well known, some are not, but all theories have their true believers. First I will list a few very “reliable rules”. Then I will list a few common but not so reliable ones. For each of the topic below, we will have follow up posts with in depth study and discussions.
Rule #1 Buy low and sell high: everyone knows that, this rule for sure is working, I definitely believe it!
