Why do Santa Claus rallies matter to investors?
Believing in Santa Claus isn't just for little kids – the strong belief in the Santa Claus rally can also be a great benefit to stock investors at the end of the year. Although it doesn't occur every year, Santa Claus rallies happen often enough that they can give your portfolio a little boost if you're careful about when you buy and sell in December.
We can never really time the market, but knowing that the Santa Claus rally is likely means that any planned sales you may make could be worth a little bit more in those last five days of December and the first two days of January, too. If you're going to buy, you may pay a little bit more, but since most Santa Claus rallies turn into a full year of gains, you'll probably still be OK if you approach the market with a long-term investing mindset.