Happy Halloween for Stocks?

October 30, 2023

Happy Halloween, tomorrow.

For seasonal investors, this is happy news.

It marks something called the Halloween Effect or Halloween Indicator. The reasons for this are a mystery (seems appropriate for the suspense of the season), but historically there is some past data that supports it.

It is the opposite of the seasonal phrase “Sell in May and Go Away” and, as Investopedia shows with a Bloomberg chart, describes how the months of November to April have generally outperformed May through October.1

According to a few academics, this has also been the case worldwide: “…we use all historical data (62962 observations) on all stock market indices worldwide to verify the robustness of the so-called Halloween Indicator or Sell in May effect. The effect seems remarkably robust with returns on average 4% higher during November-April period than during May-October.”2

That doesn’t mean we recommend buying in November any more than we would recommend selling in May. These kinds of decisions are always made in the context of a person’s risk tolerance, financial goals, and investment objectives. Plus, correlation does not imply causation.

We don’t give financial advice over—what George W. Bush called—the Internets.3

Furthermore, as one Vice President of JP Morgan Wealth Management has noted, some of the arguments against investing based on patterns like this are: past performance is no guarantee of future results, the potential tax implications of buying and selling, and evidence for why buying and holding is profitable.4

A good general rule is to focus more on time in the market rather than timing the market.

Timing can be trickier than trick or treat.



  1. https://www.investopedia.com/terms/h/halloween-strategy.asp
  2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2154873
  3. CPD: October 8, 2004 Debate Transcript
  4. What is the Halloween indicator?