With Rosh Hashanah commencing at sunset tonight, we thought it befitting to put this adage to the test after receiving inspiration from a link at the Kirk Report to an article about the roots of the saying on TheStreet.com. (According to the article, the origins of this practice seem to be the belief of Jewish investors that they should liquidate their portfolios during the holiday so that their attentions could be fully focused on their worship.)
Looking back from 1915 on, we tested the performance of the DJIA from the last close before Rosh Hashanah until the last close before Yom Kippur (nine days). Then we also looked at how the Dow did from Yom Kippur until the end of the Gregorian calendar year (December 31st).
As it turns out, the thing actually might work. The Dow averaged -0.62% from Rosh Hashanah until Yom Kippur, while it gained 1.99% from Yom Kippur to the end of the year. For those compelled to action (or to see how this year plays out), Rosh Hashanah begins tonight at sunset and Yom Kippur begins at sunset on October 1st.