Halloween best time to buy shares - NZ varsity study
Halloween is traditionally associated with ghouls, witches and trick or treating but new research suggests it's also a time to make a killing on shares.A Massey University research team say their study supports the "Halloween Indicator" theory -
Halloween is traditionally associated with ghouls, witches and trick or treating but new research suggests it's also a time to make a killing on shares.
A Massey University research team say their study supports the "Halloween Indicator" theory - which suggests investors get the best bang for their buck if they only buy stock after November and sell by May.
Professor Ben Jacobsen and finance PhD student Cherry Zhang, from the university's School of Economics and Finance, reviewed 300 years of data from the British stock exchange from 1693.
They tested seasonal patterns and found only trading practices based on the Halloween Indicator consistently gave higher returns.
Mr Jacobsen said the findings challenged the idea that risk and return were related.
Regardless of wars, industrial revolutions, the introduction of taxes and other major changes in the world, the Halloween Indicator had always worked well, he said.
"An investor with an investment horizon of five years would have remarkable odds of beating the market 80 percent of the time, with returns, excluding dividends, on average three times higher than the market, if they followed the theory," he said.
With an investment horizon of 10 years, the historical odds increase to 90 percent, he added.
Mr Jacobsen said their research covered 300 years to safeguard against statistical bias.
It was the first study to examine seasonal effects on the stock market over such an extensive period, he added.
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