Ancient, Mystical Jewish Trading Wisdom Says One Thing Or The Other About Trading On Rosh Hashanah And Yom Kippur

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Traditionally, you're supposed to sell on Rosh Hashanah and buy on Yom Kippur. Nontraditionally, you should do the opposite. Really traditionally, you shouldn't be doing either and should be at Shul. But let's hear from UBS' in-house Talmudic scholar.

“The way I learned it, you sell on Rosh Hashanah and buy back on Yom Kippur,” said Art Cashin, director of floor operations at UBS and someone with more than 50 years of experience working on Wall Street. “The thesis, I was told, was that you wished to be free (as much as possible) of the distraction of the worldly goods during a period of reflection and self-appraisal.”

Either way, in our increasingly secular world, it probably doesn't matter.

The S&P 500 has averaged a 0.5% decline in the seven or eight trading days that typically span Rosh Hashanah and Yom Kippur dating back to 1971, according to data provided to MoneyBeat by Jason Goepfert, founder of Sundial Capital Research and author of the SentimenTrader Daily Report.

Yet a closer look at this time period suggests investors shouldn’t immediately rush to sell. Mr. Goepfert noted the past 10 years have produced some volatile performances. There have been big losers during this time period, such as in 2005 when the S&P 500 fell 4.1%, in 2008 when it fell 17.8% and last year when it fell 2.2%. There have also been big winners, such as in 2003, when this timeframe generated a 3.1% gain. In 2007, it rose 3.7% and in 2010 it jumped 2.4%.

Making matters more complicated, Mr. Goepfert said the S&P 500 typically underperforms in the High Holy Days during bull markets and does better during bear markets.

“We’re leery of reading too much into it, as its consistency has degraded over the past 10 years,” Mr. Goepfert said.

Sell Rosh Hashanah, Buy Yom Kippur: a load of bupkes? [MarketWatch]
Buy Rosh Hashanah. Sell Yom Kippur. Old market adage. [In Search of the Perfect Investment]
Should You Sell Rosh Hashanah, Buy Yom Kippur? [WSJ MoneyBeat blog]
Is It Sell Rosh, Buy Yom? Or Vice Versa? [WSJ Total Return blog]

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