Browse Definitions :
Definition

Santa Claus rally

A Santa Claus rally (sometimes referred to as the Santa Claus effect or the December effect) is a sharp rise in stock prices that sometimes occurs around Christmas.

Various theories have been proposed to explain the Santa Claus rally, including the following:

  • Employees are investing their Christmas bonuses.
  • People are making investments before the end of the year for tax purposes.
  • Corporations are adjusting their holdings for a better appearance at the end of the year.
  • Wall Street is in a festive mood.
  • Pessimists are on holiday, leaving optimists to do the investing.

However, according to Investopedia.com, the most likely reason for the Santa Claus rally is an increase in share purchases made to escape paying the higher stock prices expected in the new year. A surge in stock prices early in the year is known as the January effect.

 

Continue reading about the Santa Claus rally:

 > Yes, Virginia, there really is a Santa Claus… rally.

 > Investopedia.com defines Santa Claus rally and other seasonal financial terms such as Elves, Christmas Tree and the Boston snow indicator.

This was last updated in December 2011

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

  • compliance as a service (CaaS)

    Compliance as a Service (CaaS) is a cloud service service level agreement (SLA) that specified how a managed service provider (...

  • data protection impact assessment (DPIA)

    A data protection impact assessment (DPIA) is a process designed to help organizations determine how data processing systems, ...

SearchSecurity

  • DMZ (networking)

    In computer networks, a DMZ (demilitarized zone), also sometimes known as a perimeter network or a screened subnetwork, is a ...

  • quantum supremacy

    Quantum supremacy is the experimental demonstration of a quantum computer's dominance and advantage over classic computers by ...

  • Australian Assistance and Access Bill

    The Australian Assistance and Access Bill is legislation introduced and passed in 2018 by the Parliament of Australia to support ...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

SearchStorage

Close