Christmas is full of traditions, and some investors will be eagerly awaiting the arrival of the Santa Claus rally - the uptick in shares often seen in the final trading days of the year.
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Is it a coincidence? There is a valid argument that share values are likely to rise in December. People may have end of year bonuses to invest, or perhaps the seasonal cheer makes us optimistic.
Last year, the Aussie sharemarket actually gained very little overall from the start of December to the new year.
But amid the daily ups and downs, the ASX 200 did rise 2.7 per cent between Christmas Eve and New Year's Eve - enough to convince the true believers that the Santa Claus rally is genuine. The year before, in 2017, the market rose 1 per cent in December. And in the previous year, investors saw shares steadily rise by about 4 per cent through December 2016.
That's not to say Santa always visits the market in December. In 2011 for instance, the Grinch stepped in, and equity values dipped 4 per cent ahead of the new year.
While it's all a bit of lighthearted festive fun, I personally won't be holding out. The ASX 200 has already climbed from 5646 at the start of the year to 6862 in early December, giving sharemarket investors a nice 17 per cent return for 2019.
The new year looks promising too. We're likely to see more of the same in terms of very low interest rates. The property market is gaining traction, having notched up five consecutive months of rising values nationally. This may not be great for household debt, but it's good news for housing-related shares including banks and the construction sector.
