Can flipping a page on the calendar resurrect the fading Wall Street bull? History suggests yes.
The calendar may not seem relevant to the performance of investments in your 401(k) retirement plan. But a review of stock market performance history suggests the mere flip of the calendar from one month to the next actually has a lot to do with whether your holdings lose or gain value.
This “seasonality” quirk on Wall Street is in focus now as we move from October – a month that just delivered investors a frightful scare – to November.
The reason? The 11th month of the year has a reputation for being friendly to investors.
In the past 20 years, November has been the third-best month for the Dow Jones Industrial Average, with average gains of 1.87 percent.
The Standard & Poor’s 500 stock index also has a habit of climbing higher in November. It has posted gains the past six Novembers. What’s more, November also kicks off what historically has been the best six-month stretch for stocks.
Theories as to why stocks flash green in November include investors shopping for bargains after volatile Octobers and tax selling by mutual funds, improving moods as the holiday season nears and anticipation of a year-end rally.
Investors are again hoping November will rescue the market.
Stocks rose 1.1 percent on the first day of the new month after a tweet from President Donald Trump that said trade negotiations with China “are moving along nicely.” That message was welcomed by investors who fear a full-fledged trade war will harm the global economy.
November is shaping up to be a month filled with potentially market-moving events, including the October jobs report out Friday, next week’s midterm elections and Federal Reserve interest rate meeting and the start of the holiday shopping season, which unofficially kicks off on Thanksgiving.
