This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Santa Rally page 1
Santa Claus is coming to trade…
In the business world, Christmas definitely gets earlier each year. Equities have arguably already begun what the old adage hails the ‘traditional year-end gains’ or ‘Santa Rally.’ While there’s no reason to suggest it’s a given that markets always rally into year-end, certain conditions tend to prevail that provide buoyancy – namely ‘window dressing’ by fund managers who hold onto stocks that have done well in order to entice new clients for the coming calendar year. Such hoarding of in-demand stocks can often cause bigger than normal price appreciation.
Have you done your shopping for the stocks with the best potential? We normally send this report out at the end of November, but this year that’ll be too late. We have updated our data early for the second year running on account of current market conditions.
UK 100 Index – Santa Rallies 2009-2014
Technical Observations
- The graph highlights the UK 100 ’s last five Santa Rally periods (blue boxes) giving an idea of the volatility available. Will 2015 add to the historic tally of 11 gains >3%? Or will it disappoint like 2004 with gains of just 0.2%, or even decline like it did in ’00, ‘02 and ’07?
- Will correction take hold again for a re-visit of 5770? Or will the recovery take us back to near all-time highs of 7120, giving a net 9.5% gain for the year?
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and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance.
Prepared by Michael van Dulken, Head of Research
