Will we see a year-end rally in the stock market, again?
November 13, 2024
Comes November, sometimes already in October, the year-end rally in the stock market grows into a hot topic. Yale Hirsch postulated the Santa Claus rally in 1972 narrowly referring to the last five trading days of the old and first two trading days of new year.1 Over the decades, the term and timeframe seem to have broadened. Naturally, this provokes the question: Was there a year-end rally in the German DAX in recent years and how did directors’ dealings perform in this context? BOSS STOCKS analyzed 26 directors’ dealings (stock acquisitions) in the German DAX which were published during the month of October over the last five years, and then compared them with the index’s performance between November 1 and year-end.
Year-end rally in the stock market was outperformed by directors’ dealings in the last five years
- For the past five years, the German DAX noted consistently higher at the closing of each year’s last trading day compared to the opening on November 1. The minimum/average/maximum investment returns amounted to 1%/8%/18%.
- The results further indicate that replicating directors’ dealings led to even better outcomes with minimum/average/maximum investment returns of 2%/13%/20%. In three out of five years, replicated managers’ transactions achieved a superior performance compared to the DAX. In 2022, there were no relevant directors’ dealings in October.
- 11 companies link with the 26 directors’ dealings. SAP (10) alone accounts for around 40% of the managers’ transactions.
- 19 executives relate to the 26 directors’ dealings. The top performers with a return of at least 20% included Sucheta Govil of Covestro, Armin Papperger of Rheinmetall and René Aldach of Heidelberg Materials.
- Notably, for managers’ transactions between mid-October and mid-November the performance across years would be roughly at par with the index’s.
Discover the directors’ dealings for strong investment returns with BOSS STOCKS
The results show that there has been a year-end rally in the DAX since 2019 often outperformed by directors’ dealings. BOSS STOCKS helps you replicate such directors’ dealings. Free sign up to test the product before market launch.