Thinking about what to write this week, I suggested to my editor: ‘what about an article about a Santa Rally?’. I got an excited response of ‘How fun!’. The truth of the matter is that a Santa Rally can ‘be fun’ if you are an investor benefiting from a stock market rally at the end of December – or alternatively it can be rather underwhelming (if it doesn’t happen, that is).
Every year, every investor hopes for a rally to lift their portfolio. Sadly, along with other stock market superstitions – ‘Sell in May and Go Away’ or ‘Beware of the Ides of March’ – this rarely happens… until now.
Research from Fidelity International, taking into account the last 30 years’ history of the FTSE 100 index in December, shows that out of those 30 years, 26 of those produced a Santa Rally.
December returns of the FTSE 100:
Source: Fidelity International, November 2017.
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