Market Commentary November 2018

The second part of the “Sell in May” phenomenon (“Buy after Halloween”) should bring some much needed relief to the markets. Anomalies such as this are not uncommon in financial markets, but they tend not to persist for long – as soon as they are known about they are usually arbitraged out of existence. No one knows why for sure why this anomaly has been so persistent. One theory attributes the anomaly to seasonal affective disorder (SAD). As nights lengthen in the autumn investors become more risk adverse, which drives prices down such that by the end of October prices are artificially depressed and ready to bounce back reverting to their ‘normal’ levels.