Santa Claus Rally (or Lack Thereof)
Last 5 trading days of December + first 2 of January
The Santa Claus Rally (last 5 trading days of the year + first 2 of January) has produced positive returns approximately 75% of the time since 1950. Yale Hirsch's dictum: 'If Santa Claus should fail to call, bears may come to Broad and Wall.'
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 2010-12-27 | +3.1% | +0.6% | +65.3% |
| 2011-12-23 | +4.2% | +12.1% | +77.8% |
| 2012-12-24 | +5.3% | +28.5% | +87.9% |
| 2013-12-24 | -2.8% | +13.6% | +35.8% |
| 2014-12-24 | -2.5% | -1.0% | +55.6% |
| 2015-12-24 | -8.6% | +9.8% | +81.2% |
| 2016-12-23 | +1.4% | +18.4% | +111.4% |
| 2017-12-22 | +5.8% | -8.0% | +42.7% |
| 2018-12-24 | +13.3% | +37.1% | +103.4% |
| 2019-12-24 | +0.6% | +14.5% | +85.2% |
| 2020-12-24 | +1.3% | +29.4% | +85.2% |
| 2021-12-27 | -9.2% |
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Years with a positive SCR saw above-average full-year returns. Years where the SCR was negative saw below-average returns. The signal is asymmetric — absence matters more than presence.
Tax-loss harvesting ends by late December, pension fund rebalancing flows hit, and new-year allocations begin. These mechanical flows create a temporary bid.
The effect is small (median +1.4%) and unreliable. It's useful as a narrative tool and a weak seasonal overlay, not as a basis for tactical moves.
Keep year-end moves anchored to the calendar's real deadlines — tax-loss harvesting, contribution limits, scheduled rebalancing — rather than to whether the rally shows up; its absence is at most a cue to double-check risk levels, never a reason to trade.