Tis the season… and with this year’s economic ups and downs, I thought we’d profile a hopeful buzzword for the end of the year. A Santa Claus Rally, according to Investopedia, is a surge in the price of stocks that often occurs in the week between Christmas and New Year’s Day. There are numerous explanations for the Santa Claus Rally phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week.
Many consider the Santa Claus rally to be a result of people buying stocks in anticipation of the rise in stock prices during the month of January, otherwise known as the January effect.
My hope is that both December and January upside will land real soon!