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26 October 2016

Trick or treat? Five spooky investment terms explained

By Sam Slator, communications director

Depending on whether you focus on the 'scary' or 'sweets' element of Halloween, 31 October is a date looked upon with both excitement and trepidation. And even the investment world isn't immune to its trickery … We take a quick look at five spooky investment terms.

Ghosting

This practice is actually illegal. it is when two or more 'market makers' (dealers buying or selling securities or other assets) attempt to influence the price of a company share in order to make a profit. It is illegal because market makers are required by law to act in competition with each other and not collude. It is called ghosting, as it is a practice that is difficult to detect.

Halloween indicator

This is just another version of the St Ledger's Day investment strategy. Instead of “Sell in May and go away until St Ledger's Day” it is “Sell in May and buy on Halloween”.

Witching hour

When it comes to investing, the 'witching hour' refers to the last hour of stock trading in the US, between 3pm eastern standard time (EST), when the bond market closes, and 4pm EST, when the stock market closes. Volatility in this 60 minutes can be higher than at other times during the day.

Zombie funds

This is a UK-centric colloquialism and refers to with-profits life insurance funds that are closed to new investments. They are funds that are basically only being run down until the policy matures, which could be a long period of time. Child Trust Funds (CTF) are also sometimes referred to as 'Zombie' products, as they have been replaced by the Junior ISA and existing accounts will only be held until the child reaches the age of 18 – no new CTF products will be launched.

FANGs

This alarming acronym was coined to refer to four of the US's top tech giants: Facebook, Amazon, Netflix and Google (which now trades as Alphabet).

Read more: How to pick the next cool tech stock

Treat yourself to some quality funds

So this year, don't be tricked into making the wrong investment decisions. Instead treat yourself to some quality research!

To get you started, we've pulled out our best performing Elite Fund in each sector since last Halloween¹, or you can just search all Elite Rated funds.

Where to next?

¹FE Analytics, all Elite Funds, TR in GBP. Sectors with only one fund excluded. 31/10/2015–25/10/2016

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Sam's views are her own and do not constitute financial advice.

©2016 FundCalibre Ltd. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FundCalibre, shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use.