Halloween strategy is a trading tactic, which posits that stocks perform better between October 31 and May 1 than they do during the rest of the year.
 | | Halloween Strategy | The Halloween strategy, Halloween effect, or Halloween indicator, is a market-timing strategy based on the theory that stocks perform better between Oct. 31 (Halloween) and May 1 than they do between the beginning of May through the end of October. The theory 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 Markets Hypothesis and that stocks behave in a completely random manner. | | Read More » | | Related to "Halloween Strategy" | | | | Market Timing | | While feasible for traders, portfolio managers, and other financial professionals, market timing can be difficult for the average individual investor. | | Read More » | | | Buy and Hold | | Buy and hold is a passive investment strategy in which an investor buys stocks and holds them for a long period regardless of fluctuations in the market. | | Read More » | | | Sell in May and Go Away | | "Sell in May and go away" is an adage that warns investors to divest their stock holdings in May to avoid a seasonal decline and to reinvest in November. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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