What is the calendar effect?

The effect of the calendar concerns perceived indicators or trends that are based on some aspects of the calendar. The basic idea of ​​the calendar effect is related to the performance of shares and the general performance of the market is that there are a certain period of the year when specific conditions can be developed. These permanent trends are seen as consistent and can be predicted with high accuracy.

There are several relatively well -known examples of calendar effect, which many investors believe are highly predictable. Perhaps the most popular of all calendar strategies is called January effect. In essence, this calendar effect suggests that shares with small capitals will begin to grow on the last day of December and will continue to do so on the fifth business day of January.

Most of the merit of this calendar effect owe the fact that at this time a large part of the sale is usually held, as one final means of pacching finance for the previous calendar year. The last round of sales helps to create a taxThe losses that can be caused in making tax reports in the fourth quarter helps investors to get a quick holiday and make cash and make capital gains. People who want to catch good offers will join the sales madness by purchasing shares during this small window opportunity.

Mark Twain effect is also another calendar effect that some investors swear. The author of Mark Twain's quote is the theory of this calendar effect that shares revenues are lower than any other thirty -day calendar year during October. While historical support for this theory is somewhat spotted, supporters quickly point out that they appeared in October 1929 and 1987.

The third example of the calendar is known as the Halloween indicator. This concept basically states that the stock market is from November to the following April iný ý ý ý stronger. After this perceived effect, investors are sold in May and then let their shares go to the following October, usually at the end of the month. In fact, this particular calendar effect seems to have a large number of historical details to support theory. Many Halloween indicators suggest that people who enjoy holidays and holidays during the summer months can lead to weakness on the market.