Is Santa Giving You Investment Advice?

Investment advice isn't too hard to find. Everyone's an expert these days. Even Santa Claus seems to be in on the action. I'm talking about the "Santa Claus Rally." If you haven't heard the phrase yet, you will.

The Santa Claus Rally used to be when stocks went up between Christmas and New Year's. There's somewhat of a tendency for prices to rise during that short week. Why? Well, supposedly it's some combination of people investing Christmas bonuses, people on Wall Street feeling happy because it's Christmas, pessimists being on vacation. One explanation is that people are investing because of the "January effect" (the idea that stocks go up in January). Hey, I didn't say any of this makes any sense. I'm just telling you the reasons you find out there.

Of course, these days you hear people talking about the whole month of December being a Santa Claus Rally. So the one week wasn't enough. Now it's got to be the whole month.

It's almost like "creeping Christmas" - where it seems like the Christmas shopping seasons starts earlier and earlier every year. I guess Wall Street figures that if the whole month of December gets hooked up with this Santa Claus Rally thing, people will pour more money into the stock market. You've got to give them credit: they never run out of ideas to get you to fork over your money.

As for me, I think it makes more sense to just believe in Santa Claus than to believe in the Santa Claus Rally. I believed in Santa when I was a kid and I never got hurt by it. Even when I finally had to admit that Santa really didn't exist (and I resisted about as long as I could) it wasn't so bad. C'est la vie.

But better that you should still believe in Santa Claus than waste any time thinking about this Santa Claus Rally stuff. I mean, what's the point?

For example, if the market rallies in December and you make money, are you going to take your profits on December 31st - or are you going to stay invested because, after all, with the "January effect" coming right up, you don't want to be out of the market, do you?

And what if the market doesn't rally? What are you going to do? Blame Santa?

Listen. If you believed in Santa when you were a kid, why not just stick with those happy memories? Don't spoil old Santa by dragging him down onto Wall Street. Really, can you imagine Jolly Old Saint Nick wasting any time at the Exchange? Nah, Wall Street's got nothing for Santa. And, being the jolly old elf that he is, I think he's too smart to be sucked into Wall Street's schemes. Besides,what could he possibly want or need from those people?

I mean Wall Street and Santa are like oil and water. Santa actually makes things. He employs lots of elves all year. His products make little kids happy once a year. Besides, he's got that big house up in the North Pole with no mortgage on it.

What does Wall Street make? How many people who buy their products or listen to their advice wind up feeling really happy - even once a year?

So if you spot Santa this year at some mall or department store, or you happen to catch him putting presents under your tree, don't bother asking him for investment advice. Well, maybe you could ask him how he paid off his mortgage. But besides that, just give him some cookies and watch him fly up the chimney. Then go ahead and enjoy your Christmas.

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