Halloween Indicator Could Be A Treat For ETFs

Investors of stocks and exchange traded funds (ETFs) may be feeling more tricked than treated, but one needs not get spooked, as daylight always shines.

There’s lots of energy surrounding us, with Halloween upon us, elections less than a week away and a global recession teetering on every decision the experts make. But please, do not retreat into the dark corners of your hideaway or behind the curtains of despair, because we have strengths among these ghoulish weaknesses.

For one, last Tuesday marked the start of a six-month period where the stock market has historically been its strongest, reports Mark Hulbert for MarketWatch.

Evidence that the researchers gathered in support of the Halloween Indicator’s existence was more than just the post-1970 experience of the U.S. market. They looked at stock market behavior in 36 countries besides the United States, and found evidence of this seasonal pattern in all but one of them. In addition, they found evidence that it has existed in the U.K. stock market back to 1694.

It’s worth noting that in the United States, it’s really only a pattern seen in the last three decades. In looking for an explanation of why this is a relatively recent phenomenon here, the American Economic Review revealed a possible reason: the timing of traders’ summer vacations. Perhaps in decades earlier, the timing and length of those vacations was much different.

However, there’s no proof of this, and Hulbert has his doubts based on his own limited anecdotal evidence.

Whatever happens within the markets, please have a spooktakular day, and don’t be a Halloweenie!

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