The Hampton effect refers to a downturn in trading that occurs just before the Labor Day weekend, followed by an increase in trading volume as traders and investors return after the long weekend.
The Hamptons is a traditional summer destination for wealthy New York merchants.
Increased trading volume due to the Hampton effect could be positive if it takes the form of a rally as portfolio managers place trades to bolster overall returns towards the end of the year.
This is a calendar effect based on a combination of statistical analysis and anecdotal evidence.
The Hampton effect and other similar anomalies that can be interpreted from the data are interesting findings, but their value as an investment strategy is low for the average investor.