A collection of assorted theories that assert that certain days, months or times of year are subject to above-average price changes in market indexes and can therefore represent good or bad times to invest Some theories that fall under the calendar effect include the Monday effect, the October effect, the Halloween effect and the January effect.
Investopedia Says:
Most of the evidence for these effects is anecdotal, although there is a slight statistical case to be made for some of these effects, which is more than enough to encourage some investors to place their faith in them.
Proponents of the October effect, one of the most popular theories, argue that October is when some of the greatest crashes in stock market history, including 1929's Black Tuesday and Thursday and the 1987 stock market crash, occurred. While statistical evidence doesn't support the phenomenon that stocks trade lower in October, the psychological expectations of the October effect still exist.
Related Links:
From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters. The Greatest Market Crashes
We show you how to take advantage of periodic trends in the equity markets. Capitalizing On Seasonal Effects
