The Santa Claus Rally
With Christmas approaching, it's time to discuss about Santa Claus. You might be asking what Santa has to do with investing. Surprisingly, many! Because Santa doesn't always bring gifts for children; he also brings some to investors. Join the Santa Claus Rally.What Is The Santa Claus Rally?
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The Santa Claus Rally is a minor but persistent stock market increase that occurs around Christmas. It happens throughout the last five trading days of December and the first two trading days of January. Consider it a small "holiday bonus" for your portfolio.
Where Does This Term Come From?
The word was invented by Yale Hirsch in 1972 for the Stock Trader's Almanac. Here's the cool part: Historically, the stock market has increased by roughly 80% over this time, with the S&P 500 gaining an average of 1.4%.
Why Does This Happen?
There are several hypotheses as to why this rally happens. Here are a few popular ones:Holiday Cheer: A general sense of optimism and celebration.End-of-Year Bonuses: Many investors reinvest their annual bonuses.
Less Institutional Presence: Large institutional participants (also known as "grinches") are frequently on vacation, putting the market in the hands of ordinary investors, who are more hopeful.
What Does The Data Say?
Bank of America investigated the Santa Claus Rally and discovered some intriguing tendencies. Since 1928, December has been one of the most favorable months for equities.BTC Santa Claus rally?
Although not as stable as the stock market, Bitcoin frequently faces year-end volatility owing to reasons such as:
Tax Harvesting: Investors liquidate underperforming investments to reap tax benefits.
Institutional Interest: Year-end announcements or fund allocations have a tendency to cause market volatility.
Retail FOMO: New investors rush in, hoping to ride the Christmas wave.
Interestingly, BTC tends to perform better in the final week of December than early in the month. During bullish years, this time has resulted in average gains of around 12%.
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For us investing and holding BTC this time Santa arrived early and we broke 100,000$, and it's a historic time because if you've been with crypto since the beginning, you're now feeling justified, so be pleased you stuck...