Myth or Math? › Calendar effects
Do calendar effects work?
We have tested 10 calendar effects so far: 3 MATH, 3 MYTH and 4 HALF-TRUTH. Each verdict links to the full results.
Which calendar effects have we tested?
Here is every calendar effect we have tested so far, with its verdict and the short answer.
| Belief | Verdict | Short answer |
|---|---|---|
| Do stocks rally after the midterms? | HALF-TRUTH | Half-truth. Midterm years have lagged before the vote. The year after beat other years by +7.4 points on average since 1926, but not in the last 20 years. |
| Do stocks rise before holidays? | MATH | Math. Since 1926, the day before a market holiday averaged +0.26% above cash, against +0.02% on other days. In the last 20 years: +0.17% against +0.04%. |
| Do markets love gridlock? | MYTH | Myth. Since 1927, divided years averaged +6.8% above cash, against +10.9% for one-party years. In the last 20 years: a near tie, +11.1% against +10.9%. |
| Does "sell in May and go away" really work? | HALF-TRUTH | Half-truth. Since 1926, May to October trailed November to April by 3.8 points on average, and by 2.5 points in the last 20 years. But summers still beat cash. |
| Does triple witching move stocks? | MYTH | Myth. Since 1983, triple-witching Fridays moved a little less than other Fridays, not more: 0.65% against 0.73%. In the last 20 years: 0.70% against 0.80%. |
| Is the Santa Claus rally real? | HALF-TRUTH | Half-truth. Santa's seven days beat an ordinary seven-day stretch by 1.2 points since 1926, and by 0.2 points in the last 20 years. A no-show Santa didn't reliably spoil the year. |
| Does window dressing lift stocks at quarter-end? | MYTH | Myth. Since 1926, a quarter's last five trading days averaged +0.10% above cash, against +0.15% for an ordinary five-day stretch. In the last 20 years: +0.15% against +0.24%. |
| Is the January effect real? | MATH | Math, but much smaller now. From 1927 to 2026, small stocks beat large stocks by 6.2 points more in January than in other months. In the last 20 years: 1.2 points. |
| Do the first five days of January predict the year? | HALF-TRUTH | Half-truth. After an up start, the rest of the year beat cash by 10.2 points more than after a down one (15.5 points in the last 20 years). Better odds faded. |
| Are Mondays bad for stocks? | MATH | Math. Since 1926, Mondays trailed Tuesdays to Fridays by 0.16 points a day. In the last 20 years the gap was just 0.04 points, and Mondays averaged +0.02% above cash. |
What is a calendar effect?
A calendar effect is a belief that stocks do better or worse at certain times: a month, a weekday, a holiday or an election year.
How do we test them?
Each effect is compared with a fair yardstick fixed before the test, such as ordinary days of the year or simply holding the market.
Every result also shows the last 20 years beside the long history. Read how we test a myth.