Spooky stocks: Why Halloween may be the best day to invest
Investing is wildly popular, as its a strategy to take in the cash without having to work endlessly. But, there is definitely planning and skill involved. One simple, mysterious strategy is known as the Halloween effect: invest on October 31 for historically higher returns.
Could there really be such a simple way to guarantee free cash?
Trick or trade?
For decades, analysts have attempted to crack the code of stock market to get higher returns for theirs and their clients’ investments.
However, there’s one spooky stock market trick people still can’t seem to understand.
Trick or trade?
For hundreds of years, October 31 has proven to be one of the most lucrative days to invest in the stock market. That’s right, hundreds.
Researchers have analyzed 65 developed and emerging markets with more than 60,000 monthly observations over 323 years and came to an amazing conclusion. After all the analysis, the average stock-market returns for six months after Halloween worked out to about 8.5% per year. For the other six months, from May to October, the number was only 2.1%.
The craziest part, though, is that no one knows why this “Halloween effect” is happening.
Witches on Wall Street
This Halloween effect can be traced all the way back to the 1690s, during the height of the Salem witch trials. While it may seem far-fetched to blame this stock market effect on witches, the unsolved mysteries of the Halloween effect may convince you otherwise.
First off, the Halloween effect isn’t a secret. Many people know about this stock market “trick,” yet its advantage hasn’t been traded off like all the other stock market strategies of the past. In addition, the trick has stayed consistent over time without balancing itself out. It’s a relatively simple advantage that still hasn’t lost its magic, all these years later.
As long as the Halloween effect remains a mystery, witchcraft can’t be ruled out of the equation.