What are some of the biggest stock market myths around right now? Have you heard of the “Halloween Indicator” or “Sell in May and Go Away”? If you haven’t that might actually be a good thing because these are both generalizations concocted by the financial media. The financial media, like any news outlet, gets paid to create headlines and stir up their audience. In this video, Tom and Brendan discuss some of the biggest stock market myths, and talk about why investors shouldn’t believe everything they see on TV.
The concepts behind the “Halloween Indicator” and “Sell in May and Go Away” are based on historical average returns. In the last 50 years from Halloween to May, investors have made an average return of 6.6%. From May until Halloween their average returns are just 0.8%. Tom and Brendan talk about why historical average returns are probably not the best statistic to utilize when determining your investment strategy.
More of the biggest stock market myths are disputed in this week’s video. Tom and Brendan also discuss why point and figure technical analysis is a better guide for investing than relying on historical numbers reported by the financial media. Make sure to watch!