WHAT IS THE “WEALTH EFFECT”
Courtesy: www.CertifiedMedicalPlanner.org
And … Will it Cause a Santa Clause Rally this Year?
The “WEALTH EFFECT” is the change in spending that accompanies a change in perceived wealth. Usually the wealth effect is positive: spending changes in the same direction as perceived wealth.
A “SANTA CLAUSE” rally describes sustained increases in the stock market that occur in the last weeks of December through the first two trading days in January. Explanations include the wealth effect, tax considerations, and the investing of holiday bonuses.
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Assessment
Another theory is that some very large institutional investors, a number of whom are more sophisticated and pessimistic, tend to go on vacation at this time leaving the market to retail investors, who tend to be more bullish.
QUESTION: So, do you think we will have a Santa Clause rally this year?
Please be binary in your answer: YES or NO. Your thoughts are appreciated.
INVESTING, BUSINESS AND FINANCIAL PLANNING FOR DOCTORS
Comments Appreciated
THANK YOU
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Filed under: Investing | Tagged: Santa Clause Rally; wealth effect |
WEDNESDAY
DJIA
22,878.45
+1,086.25
+4.98%
NASDAQ
6,554.36
+361.44
+5.84%
This is the very definition of a Santa Clause rally; no?
Herbert
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THURSDAY
23,137.47
+259.02
+1.13%
Herbert
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Santa Clause Rally
Dr. Marcinko – are you prescient?
Holly
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Go SANTA!
What a rally.
Jean
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2022
Not this year!
Shrem
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