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Created on 10.12.2018

Chat with Sabrina: end-of-year rally − a myth or a real stock market phenomenon?

In the run-up to the end of the year, the term “end-of-year rally” pops up everywhere in the media. What does it mean?

Historically speaking, stock prices are often at particularly high levels between the end of December and the beginning of January. From this has emerged the “end-of-year rally” phenomenon; in other words, a rise in stock market prices at the end of the year.

Just like many other stock exchange maxims, it cannot fully be explained why the “end-of-year rally” exists. It is entirely possible that the festive mood at the end of the year lends itself to purchasing. Another reason could be that the end of the year is a good time to sell old investments and look for new, fresh ones – or to invest the 13th monthly salary or an end-of-year bonus in assets.

For private investors, however, the “end-of-year rally” should not be seen as an opportunity to sell assets and hope for large profits. As a general rule, you will be better off if you stick to a long-term investment strategy.

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