Does Santa Claus Rally occur?

People often ask in each December if Santa Claus Rally exists at all? Besides some disappointed people tell that there is no Santa Claus Rally at all.
Let’s see a some statistics about it instead of rumors!

Santa Claus Rally statistics

One can prepare statistics for Santa Claus Rally in many ways. As I see, people do not even agree on when it begins or when it ends.
I wanted to know how often prices rise between the beginning and the end of December and how much the average increase is. You can see examples below.

The 3 types of stocks

When I was making the Santa Claus Rally statistics I observed the past 10 years and I found 3 major categories of stocks. These categories are:

  • Good performers: there are stocks whose price often rises and the increase of price is significant.

Santa Claus Rally often occurs in case of certain stocks

  • Bad performers: It is surprising but there are stocks whose price fall very often in December despite of everybody talking about a “rally”. People having invested in these are often frustrated saying “there is no Santa Claus Rally”.

There are stocks that perform very badly during Santa Claus Rally.  People investing in these may think that there's no Santa Claus Rally.

  • Stocks that are performing neutrally: these do not show any speciality in December. They are rising in one year and falling in the othe, just like tossing a coin. These stocks also do make people think that Santa Claus Rally does not occur.

There are stocks whose statistics do not show any influence by Santa Claus Rally.

These 3 categories apply to mutual funds, too.

So does Santa Claus Rally occur or there is no Santa Claus Rally?

The right answer is that

  • it occurs quite often
  • but not always and
  • it does not apply to all stocks or investments.

Knowing if a stocks belongs to the good performers is very important to have good profits.
It must be noted however that statistics may only improve your chances to make money but past behavior does not represent any guarantee in terms of future performance.

We recommend everybody to have a look a the monthly statistics chart (like above) before making a Santa Claus Rally investment. With the software Chartoasis Sesame it only takes 3 simple steps to prepare one.