Gifts From Santa Claus For The Market?

by Financial Design Studio, Inc. / December 16, 2017

Gifts from Santa Claus for the market?

You’ve no doubt seen the market rise this year, but did you know there is a specific rally that typically happens in late-December?  A Santa Claus rally is a rise in stock prices in the month of December, generally seen over the final week of trading prior to the new year.  This was first recorded in 1972 by Yale Hirsch in his Stock Traders Almanac.

So not only have we been given a gift from the market’s great performance this year but we could get another gift in the week ahead.

We also anticipate the tax reform bill will pass both the House and Senate and the market definitely expects it to pass too.  This recent market surge confirms it likes the outcome of proposed tax reform changes.  We do expect it will be on the President’s desk to be signed by Christmas.

As we wrote about previously there is one thing in the tax bill that pushes its popularity: the corporate tax rate being lowered.  

As the tax reform starts to affect corporations in 2018 we do anticipate the market can continue strong in the year ahead.  There have been whispers that a push toward infrastructure spending will follow early in the next year and potentially work on entitlement spending too.

A Reminder For Years Ahead:

As you invest year after year you will see days of strong performance and times of stagnant or lower performance too.  In these years when the market is doing well we are reminded to stay the course and continue investing paycheck after paycheck to accomplish goals.

No one knows what tomorrow will bring but we can continually form good habits and save over time.  The market will have good days when you see your savings advance rapidly toward your goals.  Let this year serve as a reminder for years ahead when we desire strong returns to come back.

Regardless of the day’s market performance remember that money is a tool to accomplish the goals you are setting out to achieve.  If you’re ready to set some goals we are ready to help you get started!




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