Thanksgiving Here, Then The Santa Claus Rally - Right?

With Thanksgiving due this week, it'll soon be time for a "Santa Claus Rally" to impinge itself on those of us who must follow markets for a living. "Must" isn't used lightly here, since it's gotten to the point that following markets that have been hammered by Fed monetary action and government fiscal policy seem to no longer make any sense. So the chore of monitoring price action, occasionally incorporating the numbers into some sort of report or reports to clients, etc. really does become a weary chore.

And that's pretty much where we are now. Still, that rally approaches is this year will end like so many others.

As for calling it a "Santa Claus" rally, even that's gotten to be a thorn in one's side. It's not so much the label itself as the way it's thrown around by the media sources we access. And now that print has been largely replaced by streaming and Youtube videos, we not only have to read about it, but it now fills our ears. Imagine a bunch of tone-deaf drunken amateurs trying to sing Christmas Carols, and you'll get the sense of it all.

So while it very well may come, But why?

Is it that folks party and get drunk and throw their money around mindlessly in some sort of "holiday reverie"? Could be.

Is it that, on a more authentically joyous note, folks get into the "Christmas Spirit" and eschew negative thoughts, thereby allowing for a natural rise in prices that occur when sellers find willing buyers - those enamored of the Christmas Spirit who happen to be feeling generous in the same way they dole out money to buy presents? Hmmm.

We could make up any number of reasons for these year-end rallies, but instead, we'll offer an explanation from a trusted source that is based on "year-end" rather than Santa Claus. And it's always seemed to offer at least something concrete that's consistent with the way the gears of the Wall Street Sales Engine grind throughout the year.

To put it in the context of Christmas (and why not?), it's akin to stores dressing up their windows to attract buyers of stuff to give for presents. Yep, it's a kind of window dressing.

Big investment outfits know that year-end "results" carry weight with their customers. Not only do the numbers matter, but the composition of portfolios matter. And from experience, they know just how to do end of year buying and selling to gussy up the look of the investment products they push 24/7 year-round. So when all is said and done, they manipulate the numbers to some relatively acceptable level, and - for those investors who peruse their holdings before deciding to plunge or remain invested, they present their best version of prudent and successful investing prowess.

So with that impetus, we get  - most years - a Santa Claus rally that keeps everyone upbeat, ready to throw their money Wall Street's way when the New Year begins.

For those of us who focus on reality vs. appearance, these year-end antics hold no attraction. We're not publishing anything to the general investing public to entice them to open their wallets and pocket books. We simply want to help them provide a modest and sufficient security for themselves and their families. 

When you deal with real people (as opposed the anonymous investors that buy those fancy Wall Street products) you've got a face behind every portfolio. You know that face. You understand their needs, and secondarily, their wants. You focus on making sure their needs are met, and do your best to address the wants in a prudent manner. Window dressing doesn't meet any of these objectives. 

Think of it this way: No prudent person waits for and relies on Santa Claus for his or her well-being - you know, for food, clothing, and shelter. If Santa happens to show up at Christmas, especially in our land of plenty, he'll be bringing mostly stuff we either don't really need, might possible enjoy for at least a little while, or, in the case of really useless gew-gaws and bric-a-brac, return for a refund.

Nothing against Santa, but he's just not the go-to guy when it comes to good stewardship of our earthly possessions. With good stewardship, whether we get that Santa Claus rally or not won't matter in the least.