Why winter buying favours stocks

Will there be a Santa Rally?

clock • 4 min read

It is a widely accepted belief that stocks perform better during the winter than in summer.

Indeed, according to data, the average return in the stock markets during the winter months is 7%, versus around 2% during the summer. So, why might this be the case? For one, as investors return from their summer holidays, new strategies are deployed, businesses tax years conclude, and the market is flooded with capital, there is simply more money in the market. Government U-turns on regulation call in power Another reason is the so-called Santa Rally, which occurs in the last five sessions of trading in December and first two sessions of January. In this period, optimism about...

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