Should you trade and do business during Asia’s ghost months?

Should you trade and do business in the Asian stock market during Asia’s ghost months?

It is a question that many expatriates and foreign investors and businessmen who have business interests in the region have to contend with during the months of July and August, the aforementioned “ghost months.” Trading practically comes to a halt during these times and locals, in particular, are wary of establishing or opening a new enterprise, or parting with their hard-earned money to invest in nascent projects.

As CNBC notes, stocks in Asia often take a beating during August and have been doing so since 1987. And while the seeming business slowdown is pervasive throughout the continent, the Coin Telegraph notes that it is particularly and intensely observed in countries like China, Japan, and Singapore.

Investors are not keen on trading during the ghost months. (Source)

The economic standstill is an aftermath of long-established and deep-seated traditions in China which, over the centuries, had spread to other parts of Asia. Chinese culture has maintained that during the seventh month of the calendar year, the gates of the dead open, freeing the spirits of the departed to walk the earth and interact for a time with their loved ones. Buddhists and Taoists in particular call this time the Festival of the Hungry Ghost. Practitioners and devotees are enjoined to spend this time to honor the memory of their dead relatives, family members, and friends through ritual, prayer, and other community gatherings.

Doing business or any other commercial transactions would be considered inappropriate. The ghosts especially may feel dishonored — and make their displeasure known by bringing about ill-fated business outcomes. In short, invest during this time, and your stocks have a high probability of falling. Open a store, and the ghosts just might scare customers off.

The Philippine Daily Inquirer notes that honoring ghost month can sometimes extend to social activities. Some Chinese couples do not make wedding plans or move into a new house during the month of August.

Ghost Month officially ends on September 19. With it, trading, investments, and any business movement in Asia return to normal.