Here is an old Wall Street saying that while the bears have Thanksgiving, the bulls have Christmas. Since both November and December have recorded above-average monthly returns and below-average frequencies of monthly declines since 1945, one has to conclude that this saying relates to the days just prior to each holiday, not the entire month. I think it is fairly easy to figure out why optimism grows during the final month of the year: The current year is nearly behind us and the focus has shifted to the year ahead, complete with optimistic earnings growth projections and price appreciation projections.
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