We’ve been talking about stock market anomalies that lead to outperformance…and today we’re talking about calendar effects.

Most famously, stocks tend to do well between November and April (the “sell in May and go away effect”), during the last few days and first few days of each month (the “turn of the month effect”), and in the first few weeks of the year (the “January effect”).

Here are some explanations.

The January effects seems to be driven, at least in part, by tax considerations. There may have been tax loss selling in December which beat down the stock prices…and they catch a rebound in January.

Also, the behavior of professional money managers comes into play. Money managers often “window dress” their portfolios, by purchasing stocks that have gone up to show shareholders they own them.

September and October are notoriously bad months…and some have explained that it’s due to Seasonal Affective Disorder.

Falling temperatures…and fewer daylight hours…make some people more anxious and less risk tolerant. Stocks begin to do better in late December as the number of daylight hours begins to increase after the winter solstice.

If you would like to discuss your investment strategies with a financial professional, reach out today.


About the Author:

Mark Tepper, CFP

Mark Tepper is President and CEO of Strategic Wealth Partners. While he works with a variety of clients, Mark specializes in the wealth management and financial planning needs of entrepreneurs. Since entering the financial services arena in 2000, Mark has gone on to become a Million Dollar Round Table Top of the Table qualifier, placing him in the top 0.1% of financial advisors in the country. A well-known financial commentator, he appears regularly on CNBC’s Street Signs and Closing Bell, as well as FOX Business. Additionally, he is the author of Walk Away Wealthy - The Entrepreneur's Exit-Planning Playbook, and Exceptional Wealth. Beyond that, he has been featured in numerous publications, including The Wall Street Journal, Kiplinger’s, and CNN Money.

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