Regarding investing in US stocks in December, it is often observed an upward trend based on historical data and market anomalies (empirical rules).
Historical Performance:
• S&P500 indexOver the past 40 years, December has shown an average growth rate of about 1.55%, with a high level of 77.5% for the winning rate (the percentage of years with a rise).
• EspeciallyThe year of the presidential election.In December, the win rate of the S&P500 reaches 90%, and the average increase rate tends to be even higher at 1.71%.
December-specific market phenomenon:
• Santa Claus rallyA phenomenon where stock prices are prone to rise from the end of December to the beginning of the year, especially during the last 5 trading days of December and the first 2 trading days of the new year.
• Tax loss sellingAs a year-end tax saving measure, there is a movement where investors sell stocks that have incurred losses, which may temporarily cause a decline in stock prices. However, once this selling phase is complete, there tends to be an easier entry for buying again.
Investment strategy analysis:
Based on these data and anomalies, December is considered a promising month for investing in US stocks. Especially in years with presidential elections or Santa...