DEFINITION of 'Calendar Effect'

A collection of assorted theories that assert that certain days, months or times of year are subject to above-average price changes in market indexes and can therefore represent good or bad times to invest. Some theories that fall under the calendar effect include the Monday effect, the October effect, the Halloween effect and the January effect.

BREAKING DOWN 'Calendar Effect'

Most of the evidence for these effects is anecdotal, although there is a slight statistical case to be made for some of them, which is more than enough to encourage some investors to place their faith in them.

Proponents of the October effect, one of the most popular theories, argue that October is when some of the greatest crashes in stock market history, including 1929's Black Tuesday and Thursday and the 1987 stock market crash, occurred. While statistical evidence doesn't support the phenomenon that stocks trade lower in October, the psychological expectations of the October effect still exist.

  1. October Effect

    The October effect is a theory that stocks tend to decline during ...
  2. September Effect

    The September Effect refers to the historical weakness in stock ...
  3. Monday Effect

    A theory that states that returns on the stock market on Mondays ...
  4. Weekend Effect

    The weekend effect is a phenomenon in financial markets in which ...
  5. Small Firm Effect

    The small firm effect is a theory that holds that smaller firms, ...
  6. Labor Theory Of Value

    An economic theory that stipulates that the value of a good or ...
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