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The Halloween Effect points to historically stronger stock performance from November through April.
Record Halloween spending expectations could signal strength in the upcoming holiday shopping season.
Four retail and consumer discretionary ETFs offer exposure to potential seasonal spending gains.
Are you apprehensive that a bubble formed by overvalued AI stocks can burst anytime? Or are you scared of rising rate concerns with the Fed, the ECB and the BoJ giving hawkish signals?
Well, fear before Halloween is understandable. But unlike the real event, its effect on the market is not at all scary. In fact, instead of tricking investors, the Halloween Effect is usually a treat.
Halloween Effect is a historically observed increase in stock prices from the month of November through the end of April. It is exactly opposite the popular adage "sell in May and then walk away," which refers to the six months between May 1 and Oct 31.
Among overall buoyancy, retail sales deserve a special mention this time around. Vacations, holiday season buying (both Christmas and spring season) and seasonal optimism may play a huge role in this surge.
The National Retail Federation expects consumer spending on Halloween to reach $13.5 billion this year, up from last year’s record $13.1 billion. In fact, the likely upbeat trend starts with Halloween itself as the event greets the fall season.
And "conventional wisdom is that strong Halloween spending is an indicator of strong Christmas season spending," as per an analyst. So, let's take a look at the Halloween sales projection.
Spending to Touch All-Time High This Halloween
About 74% of Americans plan to celebrate this year, almost on par with 73% last year. As much as 96% of consumers will likely shell out around $4.1 billion on candies, 78% will spend about $4.3 billion on decorations, 71% of shoppers are expected to spend $4.4 billion on costumes, and 42% will pay nearly $800 million for greeting cards.
In fact, a new idea has emerged lately. People are celebrating with Halloween trees as they do for Christmas. Needless to say, retail sales will be on a roll in the upcoming days, putting the following ETFs and stocks in focus.
The aforementioned arguments make it necessary to look at the fund. After all, 27% of shopping will likely be done online. ONLN is an Amazon-heavy ETF.
First Trust Nasdaq Retail ETF (FTXD)
As much as 39% of Halloween shopping will be done at discount stores, followed by specialty Halloween/costume stores (32%). So, discount retailer stock-heavy funds are in the spotlight now. Wal-Mart (WMT - Free Report) has considerable weight in the fund.
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Image: Bigstock
4 Halloween ETF Treats for Investors
Key Takeaways
Are you apprehensive that a bubble formed by overvalued AI stocks can burst anytime? Or are you scared of rising rate concerns with the Fed, the ECB and the BoJ giving hawkish signals?
Well, fear before Halloween is understandable. But unlike the real event, its effect on the market is not at all scary. In fact, instead of tricking investors, the Halloween Effect is usually a treat.
Halloween Effect is a historically observed increase in stock prices from the month of November through the end of April. It is exactly opposite the popular adage "sell in May and then walk away," which refers to the six months between May 1 and Oct 31.
Among overall buoyancy, retail sales deserve a special mention this time around. Vacations, holiday season buying (both Christmas and spring season) and seasonal optimism may play a huge role in this surge.
The National Retail Federation expects consumer spending on Halloween to reach $13.5 billion this year, up from last year’s record $13.1 billion. In fact, the likely upbeat trend starts with Halloween itself as the event greets the fall season.
And "conventional wisdom is that strong Halloween spending is an indicator of strong Christmas season spending," as per an analyst. So, let's take a look at the Halloween sales projection.
Spending to Touch All-Time High This Halloween
About 74% of Americans plan to celebrate this year, almost on par with 73% last year. As much as 96% of consumers will likely shell out around $4.1 billion on candies, 78% will spend about $4.3 billion on decorations, 71% of shoppers are expected to spend $4.4 billion on costumes, and 42% will pay nearly $800 million for greeting cards.
In fact, a new idea has emerged lately. People are celebrating with Halloween trees as they do for Christmas. Needless to say, retail sales will be on a roll in the upcoming days, putting the following ETFs and stocks in focus.
ETF Picks
Amplify Online Retail ETF (ONLN - Free Report)
The aforementioned arguments make it necessary to look at the fund. After all, 27% of shopping will likely be done online. ONLN is an Amazon-heavy ETF.
First Trust Nasdaq Retail ETF (FTXD)
As much as 39% of Halloween shopping will be done at discount stores, followed by specialty Halloween/costume stores (32%). So, discount retailer stock-heavy funds are in the spotlight now. Wal-Mart (WMT - Free Report) has considerable weight in the fund.
VanEck Vectors Retail ETF (RTH - Free Report)
Several discount retailers like Costco (COST - Free Report) , Ross (ROST - Free Report) , Dollar General (DG - Free Report) and WMT have solid exposure to this fund.
State Street Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report)
Amazon and Ross get a place in the top-10 holdings of the fund. Amazon takes about 25% of the fund.