It’s the end of the year, which means it’s time to look at the upcoming 2020 Santa Claus rally… right? Joy of the Trade Head Trader Jeff Zananiri and I aren’t so sure.
Whether you call it the “end-of-year rally,” “Christmas rally,” “Santa Claus rally,” etc., traders work themselves into a frenzy of anticipation every year while they wait to see if we’ll get one more rally to take advantage of. But with the recent negative retail sales report, that may not be the case this year.
This has been a crazy and emotionally draining year. It’s also been a great year for the stock market and money.
We have two weeks left in December and the craziness hasn’t stopped.
People are experiencing FOMO and trying to make their money at the end of the year. As a result, they’re taking a lot of oversized risks and are paying in the short term.
Stocks and Strategies for the 2020 Santa Claus Rally
With a 2020 Santa Claus rally not likely to happen, things are getting quiet on the stock market. Companies aren’t going to make a big splash this late in the year. Things are settling with Wall Street traders, company executives and hopefully everybody trying to unwind and enjoy their holiday season with their families.
That’s when amateur hour begins. People see a quiet market and want to start buying everything — pumping new money into the market. That’s going to hurt come January 2021.
We’ve probably said it a dozen times at this point: Don’t ruin your year trying to make it in the last month — it’s not going to happen.
Jeff’s December strategy is always to play it safe. There’s no need to be a hero, especially after a year like 2020. Play it safe, clean up your portfolio and enjoy your holidays.
If you do feel the need to trade, Jeff and I have some ideas for you. There’s a certain Florida-based company and some other safe yet beneficial options.
Check out this video to get our thoughts on a 2020 Santa Claus rally as well as our strategies to close out the year.