Holiday Magic, Market Myths, and the Santa Claus Rally

The holidays have a way of putting everything into perspective. The year slows just enough for us to notice what really matters, family gathered around the table, familiar traditions, and the quiet hope that the year ahead might bring good things.

 

In the markets, that same sense of optimism often shows up in what’s known as the Santa Claus Rally.

 

What Is the Santa Claus Rally, Anyway?

 

The Santa Claus Rally refers to the historical tendency for U.S. stock markets to perform well during the last five trading days of December and the first two trading days of January. The term was popularized by Yale Hirsch, creator of the Stock Trader’s Almanac , in the 1970s, but the phenomenon itself dates back much further, with data tracked as far as the 1950s.

 

Historically, this short window has delivered positive returns more often than not. Depending on the time period measured, markets have risen during the Santa Claus Rally roughly 70–80% of the time.

 

Why does it happen? Theories range from holiday optimism and lighter trading volumes, to year-end bonuses being invested, to institutional investors tidying up portfolios before the calendar flips. As with most market patterns, no single explanation tells the whole story.

 

And, of course, it’s worth saying clearly: seasonal trends are interesting—but they’re never guarantees. Some years Santa shows up. Some years, he doesn’t.

 

Will We See Santa This Year?

 

That’s the question everyone asks this time of year.

 

The honest answer is the same one we give throughout the year: no one knows what markets will do over a short period of time. Even when history leans one way, the future still has a mind of its own.

 

What does tend to hold true is that investors who stay disciplined, focused on long-term goals rather than short-term headlines, are far more likely to end up on the “nice” list over time.

 

Santa, Toddlers, and Reality Checks

 

On a much more personal note, Santa made an appearance in our lives this year too, though not exactly in the magical way I imagined.

 

With my boys being almost two, they don’t yet understand who Santa is. Taking them to “meet” him went over just as well as you’d expect. Let’s just say… the photos tell a very honest story.

 

Still, there’s something comforting about knowing that the magic doesn’t hinge on one moment, or one man in a red suit.

 

This year, we’re hosting family for the holidays, filling our new home with generations spanning in age from 1 to 75. There will be noise, chaos, shared meals, and memories being made in real time. That’s where the real holiday magic lives.

 

A Season for Perspective

 

The holidays, much like investing, are less about perfection and more about presence. Traditions evolve. Markets fluctuate. Children grow faster than we expect.

 

Whether Santa rallies in the market this year or not, the most meaningful returns tend to come from patience, consistency, and staying focused on what truly matters.

 

From our family to yours, we wish you a holiday season filled with warmth, perspective, and just enough magic, however it shows up. 🎄✨

 

Please note that our office is closed December 24th-26th & December 31st-January 1st.