Stock Market Halloween boost
CHATTANOOGA, Tennessee (WDEF)- In the finance world, there is typically a Halloween effect to the stock market. John Vandergriff with Blue Ridge Wealth Planners explains the theory of stocks performing better from Halloween until May 1st.
“Whenever the election happens regardless of the outcome, regardless of party win, I think just the certainty that people have of direction moving forward is what is usually good for the stock market but that’s only every four years. So to see a trend over 50 years pretty impressive and makes it where that is something to keep an eye on. When you combine a couple of things that were assumptions and then to see a study come out and confirm that it is a pretty interesting thing to look at,” said Vandergriff.
The stock market just like Halloween can be scary since two of the biggest market crashes happened in October, but he says time and facts show over the long term the market goes up.
“The stock market is something that even when we look at historical trends it can be scary just because it can lose any time but over a long enough period of time it will work out. We’ve seen that over a 20 year period. We’ve seen that over a 200 year period of time,” said Vandergriff.
He said using the last few months of the year is a good time to make sure you’re saving for the future by paying yourself first.
“Part of the reason why we talk about having emergency savings is that you don’t have to go into credit card debt to pay these outrageous rates. Paying yourself first, putting yourself in a position where the reason most people end up having anything in their 401(k) is because that money comes out before they ever see it,” said Vandergriff.
Vandergriff stresses the importance of tackling debt and keeping a budget.