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Have you heard of the so-called “Ghost Month”?

Every year, as the calendar hits the month of August, you will surely hear or read stories about it. No, Ghost Month is not just a play on words for the month of August. It actually has a meaning that is way deeper than you think.

What exactly is Ghost Month?

Ghost month is a Chinese festival celebrated during the month of August. It is said that every first day of the seventh lunar month, the Gates of Hell open wide and the ghosts come out and roam the earth.

During Ghost Month, children, senior citizens and weak people in general, are advised not to go out at night in fear of getting attacked by bad spirits. It is also believed that Ghost Month brings bad luck to couples, families and businesses. Even disasters and other bloody incidents are likely to occur.

To counter any unfortunate situation, people will offer food, light incense and burn fake money. Countries like China and Singapore hold comedic performances complete with puppet shows, songs, dances and stand-up comedy to entertain the dead.

In the area of finances, Ghost Month season has an effect too. Here are some taboos that may concern you financially throughout the month of August:

Avoid signing on contracts from marriage, opening a business, job application, financial dealings and/or major medical operations.
Avoid making big purchases such as a house or car. Reason? It may prompt jealousy among the evil spirits.
Avoid long trips. People are also told to avoid traveling during August especially if it includes a visit to the beach. Evil spirits are said to lurk around bodies of water causing death by drowning.
Avoid home or office renovation as well as moving address. Apparently, major renovations and or relocation should be avoided too, during Ghost Month season as bad luck may come yours and/or family or business.
Avoid making any type of investment. Investors commonly avoid the stock market in August due to superstitious belief that it may bring misfortune.

Ghost Month for Investors

Coincidentally, the market is found to be weak during the month of August. It even closed last August 6, 2019 at 7,766.75 far from its bull period.

Although the causes of weakness during the Ghost Month, especially for the Philippine Market, are found to be not only because of the belief.

Every August, companies release their second-quarter earnings reports. American and European fund managers take their leave during this time too. Ultimately, Chinese investors avoid the Ghost Month in terms of making business decisions.

What does this mean for an ordinary investor?

Stocks may go “on sale”, making it a good time to make additional investments. Stocks, especially the blue chips, are most likely to decline in value due to the weakness in the market, giving more buying power to your money.

Those doing the Peso-Cost Averaging method have nothing to worry at all. Because you are investing the same amount every month, you can treat August like any other month. The sudden dip in the Net Asset Value Per Share (NAVPS) can be beneficial for you to own more shares that the usual.

If you are planning to diversify your investments, then this is a good period to do so. As soon as the market recovers, you will surely reap a better harvest.

In Conclusion

Ghost Month is here to stay. You can either take a pause and wait for the month to end or better yet, TREAT IT AS AN OPPORTUNITY TO INVEST MORE. As famous author and financial literacy advocate Robert Kiyosaki once said, “The biggest risk a person can take is to do nothing.”

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