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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

November/December 2025

Is Santa Clause Coming To Town?

Close up portrait of smiling Santa Claus looking at camera and adjusting glasses on Christmas

History
Yale Hirsch, the founder of the annual Stock Trader's Almanac, coined the "Santa Claus Rally" in 1972 for the likely market performance during the last five trading days of December and the first two trading days of January (12/ to 1/ this year). But the history of the Santa Claus rally dates to the early 1900s. In 1942, author Sidney B. Wachtel presented the analysis in "The Journal of the Business of the University of Chicago." Wachtel used the Dow Jones Industrial Average (DJIA) to study the effect from 1927 to 1942.


While past performance doesn't guarantee future results, the period has posted higher stock prices about 79% of the time since 1950. The S&P 500 index has averaged a 1.3% gain during this time. When stocks decline during this period, significant market downturns have often followed. For example, in 1999, a 4% decline during the Santa Claus rally period was followed by the Dow's 37.8% slide over the next 33 months, and in 2007, a rally period decline preceded the 2008 financial crisis.


Possible Causes
One theory is that greater consumer spending during the holiday season leads to positive retail earnings, giving investors confidence and increasing stock prices. Another factor is the general mood in the market. Investors often feel more optimistic around the holidays, buying more stocks. They rebalance their portfolios and invest year-end bonuses. Trading activity among individual and institutional investors trends lower, leading to lower market volumes and upward price movements, that allow the Santa Claus rally to thrive.


Approach with Skepticism
It's smart to be aware of market conditions and focus on long-term investing strategies rather than relying on seasonal trends. Monitor your investments and overall market conditions, and stay in touch with your financial professional about how your investments could behave during this unique time.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
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