Every year, the arrival of the Ghost Month spooks a lot of people, specially traders and investors in the PSEI. It’s not the seasoned traders that get spooked, even the newcomers and would be investors get scared too with all the stories going around about Ghost Month. But what exactly is the Ghost Month and why are investors and traders so spooked about it?
The Ghost Month is a Taoist and Buddhist festival that falls on the 7th month of the Lunar Calendar where it is believed that ghosts come to visit the world of living. During this period spirits roam the land of living to cause mischief such as misfortunes, accidents and even business failures.
So now the question is, should we be spooked out of investing in the Stock Market during this period? My answer is- No. Why? Because the stock market does not always go down during the Ghost Month. In fact, if you check the chart within a 10 year period for the PSEi, you will find that there are certain years when the market was actually up during a ghost month. If you invested money during a ghost month 5 years ago, and stayed invested, you would have made a lot of money by now.
Whether you’re an investor or a trader in the stock market you can still make money in the stock market during the ghost month. For the investor who uses Peso Cost Averaging, this is probably one of the best times for you to spot opportunities to buy more shares of good companies because they tend to be cheaper. If you’ve managed to save a lot before the ghost month, you’ll be able to take advantage of this annual stock market sale and go on “Bodega Mode” on your favorite Blue Chip stocks. Traders can still make money during this period, but spotting opportunities tend to be a bit more difficult. Still, as long as you follow your trading plan based on the Resistance and Support lines that you’ve plotted as your Buy and Sell areas for your stock pick, you should still be able to make money- ghost month or not.