Businessmen often prepare well for holidays or big events early because shopping needs increase suddenly on these occasions. E-commerce platforms like Shopify are dynamic on the holidays. You must import enough items to the inventory or make discount campaigns. However, in this article, we talk about Halloween strategy and its benefit in the investment, not in selling.
Halloween strategy is also called as Halloween effect or Halloween indicator. It is an investment strategy. It is based on a theory that stocks perform better between October 31 (Halloween) and May 1 (“winter” months) than they do between the beginning of May through the end of October (“summer” months). Many investors believe in this theory, so they invest in stocks from November to April, and they invest in other aspects from May to October.
From November to April, you can boost sales if you sell online. Use product discount master if you need to discount campaigns for the Shopify store.
Do you know the phrase “sell in May and go
away”? It is related to the Halloween strategy. If you are an investment using Halloween strategy, you spend your money investing for a 6 –month period. In the remaining 6 months, you don’t invest at all. That means you just work in 6 months and reap the best part of an annual return. You choose the best time to invest instead of investing in the whole year. This is a safe method if you are afraid of wasting money in the months when the stock market can slow down.
Let’s find out the origin of Halloween strategy. It is from a stock anomaly happening from the 1930s. The anomaly came from the UK. The UK privileged class left London from May to October, so they didn’t care about their investment portfolios. Nowadays, salesmen, traders, brokers, equity analysts, and others in the investment community leave their metropolitan financial centers in summer months to go to places like the Hamptons in New York and Nantucket in Massachusetts.
In the summer months, the stock market is glooming. E-commerce can be affected, so shop owners need a marketing app. Sale pop master free is a good choice helping store owners promote the shopping demand.
Through the statistic, we see that the Halloween strategy is true. Investors get more return from November to April. Researches also show that a sell-in-May strategy is effective. You understand its effect by seeing US stocks in the period (1970-2017). The return on the Standard & Poor’s 500 Index (S&P 500) is 6.8% from November through April. It is higher from November through April than it is from May to October.
Many market observers think that summer vacation and investors’ aversion have an influence on the stock market. Market liquidity changes in the summer months.
Technical traders use the phrase “sell in May and go away”. They make use of this strategy by selling in the 6-month period (from November to April) and just working on the sidelines for the remaining 6 months. The Halloween strategy is a timing strategy, but most investors aren’t prepared to run a timing strategy. The profit could be low or high during a year. You cannot know exactly the timing the return will change. You can choose to apply Halloween strategy or not.
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