A calendar effect is any economic effect, particularly in markets, which appears to be related to the calendar. Such effects include the apparently different behaviour of stock markets on different days of the week, different times of the month, and different times of year (seasonal tendencies). The term sometimes includes multi-year effects, such as the 10-year (decadal) cycle, or the 4-year U.S. presidential election cycle. It also sometimes includes time of day effects.

Examples include:

• Halloween indicator
  Halloween indicator
  The Halloween indicator is a variant of the stock market adage "Sell in May and go away," the belief that the period from November to April inclusive has significantly stronger growth on average than the other months. In such strategies, stocks are sold at the start of May and the proceeds held in...
  
   (or the 'Sell in May' principle)
• January effect
  January effect
  The January effect is a calendar-related anomaly in the financial market where financial security prices increase in the month of January. This creates an opportunity for investors to buy stock for lower prices before January and sell them after their value increases.Therefore, the main...
  
  
• January barometer
  January barometer
  The January barometer is the hypothesis that stock market performance in January predicts its performance for the rest of the year. So if the stock market rises in January, it is likely to continue to rise by the end of December...
  
  
• Mark Twain effect
  Mark Twain effect
  In some stock markets, the Mark Twain effect is the phenomenon of stock returns in October being lower than in other months. The name comes from the following quotation in Mark Twain's Pudd'nhead Wilson: "October. This is one of the peculiarly dangerous months to speculate in stocks...
  
  
• Monday effect
• Weekend effect
• Turn-of-the-Month effect
• Holiday effect

In their 2001 paper Dangers of data mining: The case of calendar effects in stock returns (Journal of Econometrics), Sullivan et al. argue that there is no statistically significant evidence for calendar effects in the stock market

Stock market

A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...

, and that all such patterns are the result of data dredging

Data dredging

Data dredging is the inappropriate use of data mining to uncover misleading relationships in data. Data-snooping bias is a form of statistical bias that arises from this misuse of statistics...

.

Market price

Market price

In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics...

s are often subject to seasonal tendencies because the availability and demand for an item is not constant throughout the year. For example, natural gas

Natural gas

Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 prices often rise in the winter because that commodity

Commodity

In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....

 is in demand as a heating fuel. In the summer, when the demand for heat is lower, prices typically fall.

Seasonal patterns are not confined to prices; many other systems can exhibit the same kind of calendar effect. However, the term is most often used in an economic context.

See also

• Market timing
  Market timing
  Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis...
  
  
• Eternal September
  Eternal September
  Eternal September is a Usenet slang expression, coined by Dave Fischer, for the period beginning September 1993...
  
  
• July effect
  July effect
  The July effect, sometimes referred to as the July phenomenon, is a perceived increase in the risk of medical errors and surgical complications that occurs in association with the time of year in which medical school graduates begin residencies....
  
  
• Halloween indicator
  Halloween indicator
  The Halloween indicator is a variant of the stock market adage "Sell in May and go away," the belief that the period from November to April inclusive has significantly stronger growth on average than the other months. In such strategies, stocks are sold at the start of May and the proceeds held in...
  
  
• Seasonal adjustment
  Seasonal adjustment
  Seasonal adjustment is a statistical method for removing the seasonal component of a time series that is used when analyzing non-seasonal trends. It is normal to report un-adjusted data for current unemployment rates, as these reflect the actual current situation...