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Halloween Effect

Investors are flying off the handle over Halloween as it is believed, historically, as the start of the winning season for equities. In fact, pretty much all the return on stocks is realized amongst November to April. Hence the term “Halloween effect”, which refers to the market anomaly of a monthly period which holds best return offered by stocks during November through April. The selling period, which is also known as “sell in May and go away”, is based on the premise of the six “winter” months of November through April. Using the mix of two, an investor using Halloween strategy would be fully invested for one six month period and out for the rest.

Correspondingly, as there is an effect on stocks that brings splendid opportunities, investors must construct a strategy towards the effect to obtain profit. In summer, investors ought to step away from investing in equities following their strategy. The Halloween strategy is to be fully invested for one six-month period and out of the market for the other six months of the year. Consequently, investors would acquire the foremost part of an annual return, yet with just half the subjection of someone who invests in stocks throughout the year

Many researchers believe that summer vacations do have  an impact on market liqu