December is a month that has had more wins than losses over the past 70 odd years, with the percentage of winning months being about 75%. This translates to it being one of the best performing months historically.
As of whether Santa Claus is really the cause of this rally, one might want to seek the opinions of his transport workers: the reindeers (or modern day Tesla). $Tesla Motors(TSLA)$
But we as investors must remember: Saigon is where we are evacuating from. This stock market rally has all the makings of a possible short lived one. Interest rates, although signalled to come down, is still high. High interest rate impact on businesses is substantial, especially those with high amounts of financing. Coupled with the multiple consecutive weeks of gains, the market has to eventually take a breather.
How then should we position ourselves in this market? For one, it is important to HAVE A POSITION. Not having a position at all runs the guaranteed risk of losing out to inflation. At the same time, one has to manage risks properly, setting proper stop losses and hedging appropriately for traders, and diversifying widely by sector/geography for investors. Take advantage of trading tools too. Selling puts is a surefire way to make money, especially if you're one that doesn't mind owning the stock at current prices. Selling an put with a strike price lower than that of the current price would net you a premium, as well as the stock should the price of the stock hits your strike price. If it doesn't, well, at least you have the premium.
Again, this article is just another one of my musings. Feel free to reach me in the comments should you have any opinions; I'd love to learn from you all:)
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Santa's rally to last till?