Wall Street survived the frightful month of October — known for crashes like Black Monday in 1987 — with the Dow Jones industrial average gaining 4.3%.
November, which has been one of the best months of the year, and also kicks off the strongest six-month stretch for stocks.
Past performance suggests the U.S. stock market — which has been climbing steadily this year, pushing the Dow to 54 record highs and up nearly 19% — may enjoy a seasonal tailwind.
Consider these statistics:
- In the past 20 years, the Dow has posted average gains of 1.9% in November, third best of all 12 months, says Bespoke Investment Group.
- In the current bull run that began in March 2009, the broad Standard & Poor’s 500 stock index has gained 1.75% in November, vs. the average gain of 1.2% in Novembers since 1983, Bespoke data show.
- In years like 2017, when stocks have been up 10%-plus thru October, the S&P 500 averaged a November gain of 2.7%. It finished up 87% of the time.
“The stock market often tends to be momentum driven where strength begets strength,” Bespoke noted in a report.
Still, with many questions surrounding coming potential changes to the tax code and stocks on their longest run without a 3% dip, “be ready in case there is some overdue volatility,” warns Ryan Detrick, senior market strategist at LPL Financial.
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