Personal Wealth Management / Expert Commentary

Fisher Investments Reviews the Truth Behind the “Santa Claus Rally”

Fisher Investments’ founder, Executive Chairman and Co-Chief Investment Officer, Ken Fisher, shares his thoughts on the famed “Santa Claus rally” and why seasonal market indicators are as real as Santa Claus himself. The cheery moniker is given to the market’s purported tendency to rise around the Christmas holiday.

According to Ken, the Santa Claus rally and other seasonal market indicators like “Sell in May” or “So Goes January” are merely myths. They work just often enough to make people believe there may be a trend. In reality, Ken says they are not statistically valid, nor should investors pay attention to them. Instead, Ken thinks investors should enjoy Christmas for the wonderful time of year that it is, and not extrapolate it to the stock market.

Transcript

Ken Fisher:

So, we're coming into December and it's coming toward Christmas time. Coming toward Christmas time, people often say, is there any validity, reality, substance, to the legendary Santa Claus rally? So, first I just hope that not too many children under about six are listening right now. And if you are, I hope you don't take anything about investing very seriously. Because if you're six, you should be doing more important stuff. But the fact of the matter is, just said simply, Santa Claus isn't real. Did you know that?

There really isn't Santa Claus other than, you know, maybe daddy playing Santa Claus for the kids or the grandkids and you know, the guy that sits in the supermarket where little children sit in his lap and he lies to them. The reality is, there is no Santa Claus rally. There is no consistently valid statistics to show anything about a Santa Claus rally.

This falls into the same category as all of the other calendar features that people talk about. They work just often enough and people get energized by the few times they work to make people think "Oh, this might be real. Probably real." But this is just like the January indicator. It's just like "Sell in May, go away." It's just like. It's just like. It's just like. I mean, there's day of the week indicators that people believe in. None of them are statistically valid and you shouldn't pay attention. The reality is Christmas is just a wonderful time of the year. You should enjoy it for what it is. You should enjoy it for all of the things that it came from. And you should not extrapolate it to the stock market, or the bond market or any other capital market.

Thank you for listening to me. Hi, this is Ken Fisher. Subscribe to the Fisher Investments' YouTube channel if you like what you've seen. Click the bell to be notified as soon as we publish new videos.

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