Insights
Find the latest news and insights from TrueShares below.
What No Santa Claus Rally Might Mean for 2025
Santa may have delivered gifts to many this holiday season, but he has delivered nothing but coal for the stock market. During the last five trading days of December and the first two trading days of January, all three major indices have finished in the red during what’s known as the Santa Claus Rally period. During these seven trading days, the S&P 500 was down -1.58%, the Dow was down -1.29% and the Nasdaq was down -2.02%*.
Historically, stocks have been positive 79% of the time since 1950 with an average gain of 1.3% in the S&P 500 during this period1. Experts attribute this holiday surge to corporate bonus time, holiday spending, and a general quieting of the trading desks, news cycle, and earnings reports2. This normally jolly time is often used as an indicator to help predict the returns for the remainder of the new year.
Negative returns during this period have often historically preceded market downturns1, but not always. The absence of a Santa Claus Rally last year, when the S&P 500 was down 0.9%1, appeared to have no relevance for 2024 as a whole as it just finished in double-digits for all three major indices. The S&P 500 ended 2024 up 24%, which landed the first two-year streak of +20% gains since the late 1990s3. The S&P 500 also had 57 record high closings in 20244. The year also ended with the Dow up 13% and the Nasdaq up 31%.
A better indicator for 2025 may be the January Trifecta, which combines the Santa Claus Rally with the first five trading days of January plus the “January Barometer” (the entire month of January.) Since 1950, when all three indicators are positive, the market has also ended the year positive nearly 90% of the time, with an average gain of almost 18%1.
Regardless of Santa’s absence, experts are expecting a bumpy sleigh ride in 2025 with a new administration and uncertainty around interest rates and inflation ahead. With volatility likely characterizing the markets this year, volatility smoothing tools for an investor’s portfolio may be a winning strategy as opposed to betting on a bull or bear ending to the year.
Incorporating TrueShares Structured Outcome ETF Series and/or the Quarterly Bull Hedge ETF (QBUL) and Quarterly Bear Hedge ETF (QBER) as accessories to a diversified portfolio is one possible strategy for smoothing anticipated volatility in the market in 2025. Structured Outcome ETFs target a downside buffer to protect against the first 10% of losses without capping market gains (subject to options pricing)**. The Bull and Bear Hedge ETFs use call or put options to potentially create gains in bull or bear conditions, respectively. After all, Santa only comes once a year, but the ups and downs of the market can happen at any time.
- https://www.investopedia.com/terms/s/santaclauseffect.asp
- https://finance.yahoo.com/video/santa-claus-rally-everything-investors-154044895.html
- https://www.investopedia.com/what-to-expect-from-the-us-stock-market-in-2025-8762883
- https://www.marketwatch.com/story/stocks-are-skipping-the-santa-claus-rally-again-this-year-that-doesnt-bode-well-for-january-ee018756
*Source: Bloomberg
**Upside participation is measured by an estimated market upside participation rate that is determined once underlying portfolio holdings are established on the first day of trading. Due to the cost of the options used by the Fund, the correlation of the Fund’s performance to that of the S&P 500 Price Index is expected to be less than if the Fund invested directly in the S&P 500 Price Index without using options, and could be substantially less.
For more information on the Structured Outcome ETF Series, visit www.true-shares.com/products/
For more information on the Quarterly Bull Hedge ETF, visit www.true-shares.com/qbul/
For more information on the Quarterly Bear Hedge ETF, visit www.true-shares.com/qber/
The Funds have characteristics unlike many other traditional investment products and may not be suitable for all investors. Investors may experience losses beyond the targeted buffer levels. The Funds do not provide principal protection and an investor may experience significiant losses on its investment, including the loss of its entire investment.
Thought Leadership,
Straight to Your Inbox
Disclosures
©2025, TrueShares, ©2025 TrueMark Investments, LLC. (“TrueMark”).
Before investing, carefully consider the TrueShares ETFs investment objectives, risks, charges and expenses. Specific information about TrueShares is contained in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.www.true-shares.com. Read the prospectus carefully before you invest.
An investment in TrueShares is subject to numerous risks, including possible loss of principal. The ETFs are subject to the following principal risks: Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk associated with ETFs; Equity Market Risk; Management Risk; Market Capitalization Risk (Large Cap; Mid Cap, Small Cap Stock); Market Risk; New Fund Risk: The Fund is a recently organized, non-diversified management investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Additionally, the Adviser has not previously managed a registered fund, which may increase the risks of investing in the Fund.
Depositary Receipts Risk. American Depositary Receipts (“ADRs”) have risks similar to those of foreign securities (political and economic conditions, changes in the exchange rates, etc.) and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares.
Individual investors should contact their financial advisor or broker dealer representative for more information on TrueShares ETFs.
Investment Products and Services are: NOT FDIC INSURED / MAY LOSE VALUE / NO BANK GUARANTEE.
All registered investment companies, including TrueShares, are obliged to distribute portfolio gains to shareholders at year-end regardless of performance. Trading in TrueShares ETFs will also generate tax consequences and transaction expenses. The information provided is not intended to be tax advice. Tax consequences of dividend distributions may vary by individual taxpayer.
TrueShares ETFs are bought and sold through exchange trading at market price, not Net Asset Value (NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their NAV, on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETF’s NAV. Brokerage commissions and ETF expenses will reduce returns.
Fund Intelligence Mutual Fund Industry and ETF Award shortlists and winners are comprised of individuals and firms who have submitted entries or been nominated via the online submission process, as well as through recommendations from leading market participants. Fund Intelligence Mutual Fund Industry and ETF Award judges will use the submitted application material, as well as any uploaded supplemental information, to determine which firm, individual or product they believe to be the most suitable and deserving winners for each category. Fund Intelligence Mutual Fund Industry and ETF Award judges have the discretionary power to move nominations into alternative categories that they think may be more suitable. Fund Intelligence Mutual Fund Industry and ETF Awards were decided by an independent panel of 20 judges with expertise across the asset management space.
TrueShares ETFs (the “Funds”) are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940. The fund is distributed by Paralel Distributors LLC, Member FINRA. Paralel is not affiliated with TrueMark Investments, LLC. TrueMark Investments, LLC, is the investment advisor to the Funds and receives a fee from the Funds for its services.
TrueMark Investments, LLC is the investment advisor to the Funds and receives a fee from the Funds for its services.
TrueShares ETFs are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this website should be considered a solicitation to buy nor an offer to sell shares of any fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.