Understanding the Halloween Indicator Strategy

Posted on October 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SELL IN MAY – AND GO AWAY

By Staff Reporters

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Essentially, the HALLOWEEN INDICATOR is a market-timing strategy. It argues that, by buying into the stock market after Halloween and selling at the end of April, investors would generate a better annual return on their portfolio than if they had remained invested throughout the year. Sell in May and go away is an investment strategy for stocks based on a theory that the period from November to April inclusive has significantly stronger stock market growth on average than the other months

The practice of abandoning stocks beginning in May of each year is widely thought to have its origins in the United Kingdom. The privileged class would leave London and head to their country estates for the summer months, where they would largely ignore their investment portfolios. To this day, many stock market watchers have postulated that the corresponding impact of summer vacations on market liquidity and investors’ risk aversion is at least partly responsible for the difference in seasonal returns.

In what is considered to be a seminal piece of research on the subject, “The Halloween Indicator, ‘Sell in May and Go Away’: Another Puzzle,” authors Sven Bouman and Ben Jacobsen were among the first to document a strong seasonal effect in global stock markets. In 36 of the 37 developed and emerging markets they studied between 1973 and 1998, the authors found returns in the November through April period to be, on average, significantly higher than those in the May through October period, even after taking transaction costs into account. What puzzled the authors was the fact that, while the anomaly was widely known and seemed to offer considerable economic rewards, it had not been arbitraged away.

More recently, Jacobsen partnered with Cherry Zhang on a follow up study, titled, “The Halloween Indicator: Everywhere and All the Time,” and extended the research to 108 stock markets using all historical data available. The result was a sample of 55,425 monthly observations (including more than 300 years of UK data), which helped to rebut any criticisms of data mining and sample selection bias. The results were compelling, as the November through April “winter” period delivered returns that were, on average, 4.52% higher than the “summer” returns. The Halloween effect was evident in 81 out of 108 countries. The size of the Halloween effect varied across geographies. It was found to be stronger in developed and emerging markets than in frontier markets.

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MORE: https://medicalexecutivepost.com/2021/10/30/the-halloween-index-investment-strategy/

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Rethinking Productivity in Wealth Management

Posted on October 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Vitaliy Katsenelsen CFA

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One of the biggest hazards of being a professional money manager is that you are expected to behave in a certain way.

One of the biggest hazards of being a professional money manager is that you are expected to behave in a certain way: You have to come to the office every day, work long hours, slog through countless emails, be on top of your portfolio (that is, check performance of your securities minute by minute), watch business TV and consume news continuously, and dress well and conservatively, wearing a rope around the only part of your body that lets air get to your brain. Our colleagues judge us on how early we arrive at work and how late we stay. We do these things because society expects us to, not because they make us better investors or do any good for our clients.

Somehow we let the mindless, Henry Ford–assembly-line, 8:00 a.m. to 5:00 p.m., widgets-per-hour mentality dictate how we conduct our business thinking. Though car production benefits from rigid rules, uniforms, automation and strict working hours, in investing — the business of thinking — the assembly-line culture is counterproductive. Our clients and employers would be better off if we designed our workdays to let us perform our best.

Investing is not an idea-­per-hour profession; it more likely results in a few ideas per year. A traditional, structured working environment creates pressure to produce an output — an idea, even a forced idea. Warren Buffett once said at a Berkshire Hathaway annual meeting: “We don’t get paid for activity; we get paid for being right. As to how long we’ll wait, we’ll wait indefinitely.”

How you get ideas is up to you. I am not a professional writer, but as a professional money manager, I learn and think best through writing. I put on my headphones, turn on opera and stare at my computer screen for hours, pecking away at the keyboard — that is how I think. You may do better by walking in the park or sitting with your legs up on the desk, staring at the ceiling.

I do my best thinking in the morning. At 3:00 in the afternoon, my brain shuts off; that is when I read my emails. We are all different. My best friend is a brunch person; he needs to consume six cups of coffee in the morning just to get his brain going. To be most productive, he shouldn’t go to work before 11:00 a.m.

And then there’s the business news. Serious business news that lacked sensationalism, and thus ratings, has been replaced by a new genre: business entertainment (of course, investors did not get the memo). These shows do a terrific job of filling our need to have explanations for everything, even random events that require no explanation (like daily stock movements). Most information on the business entertainment channels — Bloomberg Television, CNBC, Fox Business — has as much value for investors as daily weather forecasts have for travelers who don’t intend to go anywhere for a year.

Yet many managers have CNBC, Fox or Bloomberg TV/Internet streaming on while they work.

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NEPO BABIES: Broke Too Often!

Posted on October 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Nepo babies often go broke due to a mix of financial mismanagement, lack of resilience, and the illusion of inherited success. Their privileged upbringing can mask the need for discipline, adaptability, and long-term planning—traits essential for sustaining wealth.

The term nepo baby—short for nepotism baby—refers to children of celebrities or influential figures who benefit from family connections to launch careers, especially in entertainment, fashion, or media. While these individuals often start with significant advantages, including wealth, fame, and access, many struggle to maintain financial stability over time. The reasons are complex and rooted in both personal and systemic factors.

First, many nepo babies lack financial literacy. Growing up in environments where money flows freely, they may never learn budgeting, investing, or the value of money. Without these skills, they’re prone to overspending, poor investments, and unsustainable lifestyles. Lavish purchases—designer clothes, luxury cars, expensive homes—can quickly drain even sizable inheritances if not managed wisely.

Second, the illusion of guaranteed success can be dangerous. Nepo babies often enter industries where their family name opens doors, but that doesn’t guarantee longevity. Fame is fickle, and public interest can fade. If they don’t develop their own talents or work ethic, they may find themselves unemployable once the novelty wears off. This overreliance on family reputation can lead to complacency, making it harder to adapt when challenges arise.

Third, many nepo babies face identity crises and public scrutiny. Constant comparisons to their successful parents can erode confidence and create pressure to live up to unrealistic expectations. Some rebel by distancing themselves from their family’s legacy, while others try to prove themselves in unrelated fields. Either way, this struggle can lead to erratic career choices and unstable income streams.

Fourth, fame without privacy can fuel destructive habits. The entertainment world is rife with stories of young stars—many of them nepo babies—falling into substance abuse, reckless behavior, or toxic relationships. These issues not only affect mental health but also lead to legal troubles and financial loss. Without strong support systems or accountability, it’s easy to spiral.

Finally, inherited wealth can disappear quickly without proper estate planning. Trust funds and inheritances may be mismanaged or depleted by taxes, lawsuits, or poor financial advisors. Some nepo babies assume the money will last forever and fail to plan for long-term sustainability. Others are exploited by opportunistic friends or partners who take advantage of their naivety.

In contrast, those who succeed often do so by acknowledging their privilege, developing their own skills, and surrounding themselves with trustworthy mentors. They treat their inherited platform as a launchpad—not a safety net—and work to build something lasting.

In short, nepo babies go broke not because they lack opportunity, but because opportunity without discipline is a recipe for downfall. Wealth and fame are fleeting without the grit to sustain them. The lesson here isn’t just about celebrity—it’s a universal truth: success inherited must still be earned.

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SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com 

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