Santa Investment Rallies – Do They Exist?

You may have heard financial commentators talk about a so-called ‘Santa Rally’ over the last few weeks. Broadly defined as a surge in stock prices occurring over the Christmas and New Year period, we thought we would take the opportunity to investigate a little deeper to see if there is actually some substance to it or if it has just been fabricated by the stockbrokers of Wall St.

The term Santa Rally has been accredited to Yale Hirsch in 1972 who was the Editor in Chief of the Stock Trader’s Almanac. He researched ‘the last five trading days of the year plus the first two of the New Year’ and concluded the S&P500 increased by an average 1.5% for that 7-day window back to 1950.

If we extend the research up to 2009, there definitely appears to be a trend of positive returns over the Christmas period.

Numerous explanations have been cited for the phenomenon, including:

• Additional investments with tax considerations in the lead up to the end of the financial year in the United States,
• General happiness and optimism in the population at that time of year,
• People investing their Christmas bonuses

Fortunately we live in a global economy where the Australian economy can benefit from confidence overseas and indeed we have seen similarly positive results in Australia. A study of the Australian Share Market from October to January over 33 years (1982 – 2015) has indicated:

• 28 years of growth,
• 2 years of neutral returns, and
• 3 years of decline.

This represents an impressive 84.8% of years with a positive return over the timeframe. We know of course that past performance can’t be relied upon to predict future performance, but the trend is certainly interesting!

We invest a great deal of time and effort researching the best tax effective investment strategies for our clients. We have developed a number of systems to manage and track the marketplace.

The investment landscape always evolves and it is more important than ever to consider your investments and superannuation funds carefully. We pride ourselves on being experts in researching opportunities, investments and strategies that fit in with your retirement goals. We want, our clients to get on with enjoying their life rather than worrying about money.

For an obligation free conversation about your financial future, please contact us on 03 9603 0072 or at

Phillip Richards and Robert Rich
Endorphin Wealth Management

Phillip Richards is a qualified Financial Advisor with over ten years’ experience. Contact Phillip today to discuss how you can build your own wealth and plan to reach your retirement goals.

Robert Rich is a qualified Associate Financial Advisor with over nine years of personal investment experience. 
Contact Robert today to discuss how you can build your own wealth and plan to reach your retirement goals.



This information is general in nature and does not take your personal situation into account.

Contact Us for quality financial advice so you can feel good about your future.