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Halloween Investment Strategy
Definition
This is a stock investment strategy and relies on empirical research which states that most capital gains in the broad markets occur between 31 October and 1 May.
Using the term Halloween Investment Strategy :
After taking off his Mr. Magoo mask, the investor buys stocks on 1 November. He will only own stocks from now until 1 May. He will then sell and be out of the market for the other six months of the year.
Pay Special Attention To :
Timing strategies are risky and when they become popular their effectiveness tends to wane. Holding investments for longer continuous time periods removes the risk of mis-timing the markets. That being said, there is some evidence that the Halloween strategy has some historical precedent.
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Related terms
Seasonal Strategies
