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The “November effect” refers to the idea that stocks that were suppressed by tax-loss selling in October are supposed to rebound in November as that selling pressure eases. This often happens because fund managers have to finish booking losses against gains by the end of October.
Yet the November effect has badly disappointed so far this year. Earlier this month, the seasonal effect was neutered by
stock-market weakness. Both the S&P 500 SPX and Nasdaq COMP were off by several percentage points in early November.
This post was originally published on Market Watch
