November can be a month of extra Thanksgivings for investors
By Dian Vujovich
Along with the cooler weather, a Thanksgiving holiday, and way too much pressure to spend for the upcoming year-end holiday season, November has historical been a good month for investors.
At the close of business on Nov. 1, the Dow was up over 19 percent; the NASDAQ ahead nearly 30 percent and the S&P 500 had gained well over 23 percent. So far, 2013 has clearly been a great year for investors whose choice has been simple index investing.
Whether or not that upward trend will continue through the end of the year is anybody’s guess. You and I both know that trees don’t grow to the sky and that markets always correct. That said, history has shown that November has been one of the best months of the year to buy stocks. And, that the stock market can continue upward no matter what the fundamentals indicate.
I enjoy Louis Navellier’s MarketMail newsletter— particularly when it includes lot of historical data as the Nov. 5 letter has. From it comes this about buying stocks: “November is typically one of the best months on the calendar to buy stocks. Since 1950, the S&P has risen an average 1.6% in November…”
That same newsletter quoted Bespoke Investment Group (BIG) research pointing out the following:
•.”The Dow Jones Industrials have averaged 1.88% in the last 20 Novembers, while the S&P 500 isn’t far behind at 1.68%…”
• “In the 35 years (since 1928) in which the S&P 500 has been up more than 10% year-to-date through October, the S&P 500 has averaged a November gain of 2.57% with positive returns 73.5% of the time. Over the final two months of these years, the S&P has averaged a gain of nearly 5% with positive returns 82.4% of the time.”
And here’s the kicker from Navellier for those who see the bull continuing to run rather than stumble: “In the 13 years in which the S&P has risen over 20% through October 31 (like this year), Bespoke adds: “The average November return gets even better at +3.22% with positive returns in all but two years (1938 and 1943). The last two times the S&P 500 was up more than 20% YTD through October were in 1995 and 1997. In 1995, the index gained 4.1% in November and 5.92% through year end, while in 1997, the index gained 4.46% and 6.1% through year end.” By contrast, November is soft when the full year is bad….”
While it will be weeks before we know what historians will write about the market’s performance in November 2013, when it comes to you and your investments it’s important to remember that past/historical performance is one thing and making money today is quite another.
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