Spooky Scary Strategies

1/?What is the Halloween Strategy?

With Halloween rapidly approaching many traders and investors are caught up in tricks and treats, and few know that there is actually a Halloween strategy. That's too bad, because it's a strategy worth paying attention to. Gordon Scott, CMT wrote an article last year all about what it is and why you should use it. Scott tells us the idea is "that stocks perform better from Oct. 31 (Halloween) to May 1 than they do from the beginning of May through the end of October." The strategy encourages interested investors to buy more in the fall and sell in the spring.?

2/ How Does it Perform?

The performance of the strategy is notable. Scott writes, "Results also show that a strategy of selling in May is successful in beating the market more than 80% of the time when employed over a five-year horizon, and more than 90% successful in beating the market when used within a 10-year time frame." Using the S&P 500 in the graph below we can see the effect in action.?

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