Now that October is over, we have the chance to reflect on what happened in the market over the past month. October brought us a negative return on the S&P 500 and with October ending down, that means stock indexes have finished down the last three month's consecutively. This is the first such occurrence since the COVID-19 pandemic.
Since 1950, there have been 22 examples of a negative three-month period. Although the S&P 500 was down approximately 3% in October, history shows us that this may mean good things.
November is the best performing month since 1950 and second best month over the past 5 and 10 year periods of time. Furthermore, during only one of the past 11 Novembers has the S&P 500 been down for the month. Additonally, November has been the start of both the strongest two-month and six-month periods for stocks over that same time span.
Below, please find some additional facts:
- October has been a negative month 19 times since 1950.
- The average return in November of those years has been 2.4%.
- The average return in November and December of those years is 5.2%.
- The average return in November-April has been nearly 7%.
- When the "red" month losing streak ends at 3 months, the average return one year later is 17.9%.
- Additionally the market has been positive 81% of the time one year later.
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is not a guarantee of future results.