Financial consultant explains ‘Halloween Effect’ on stock markets

Good Morning CT at Nine

(WTNH)– This Halloween, investors may be in for a treat. That’s according to the Halloween Effect, the idea that markets tend to do better following the holiday. 

So does it really hold true? Chartered financial Consultant John Caserta explains what this all means to investors in the video above.

The Halloween Effect essentially says stock market returns are seasonal and that returns are higher between November and April than they are during the rest of the year.

Caserta says it’s an idea that originated with a research paper back in 2002 that expands on the investing idea of “sell in May and go away.”

New research is showing the trend tends to hold true and has become even stronger in recent years both in the U.S. and in other countries.

While it can be fun, long-term investors should not rely on short-term strategies to achieve their goals.

Caserta suggests to work with a professional to put together a portfolio that is focused on your goals and is appropriate for how much risk you can tolerate.

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