The Month of November 2020
The S&P500 closed the month of November 2020 with a minus of 0.46%. Yet, this should not hide the fact that this November blended perfectly into this already-turbulent year. In fact, we just experienced the best November since 1980 and the fourth best since 1928 (see the chart below). But let’s go one by one. Typically, November is one of those months falling into a rather pleasant time of the year. Those following the mantra “Sell in May and Go Away” invest from the beginning of November until the end of April. Every year, others are looking forward to the annual end-of-the-year rally, which typically begins sometime in November and lasts until the end of the year. Looking back at 90 years of stock market history, we believe that the best quartal is usually the one that lasts from November until January. As the distinguished reader can see, November is a rather positive month for investors and stock market brokers. Let us now look far back into the past and see how the month of November really performed over all those years.
The chart above shows the slightly above-average performance of the bespoken month. Especially from the middle of the past century onwards, we can indeed see a very positive performance.
As the table above illustrates, the month of November typically performs quite well. As a comparison, we are using the worst month of the year – September. As already mentioned, the above-average performance of the month of November established itself in the middle of the last century.
In contrast to table 1, table 2 depicts a substantial increase in investors’ yields. Among the 50 best-performing months since 1950, the month of November features, alongside the month of June, six times; only the months of April and October are to be found more often in this list.
As the table above shows, the month of November features disproportionately often in the list of the best-performing months. Where, however, does it feature in the eternal ranking of the worst-performing months? Table 4 will provide some insights into this question:
Table 4 illustrates that the month of September clearly defends its reputation as the worst-performing month. In contrast to that, the month of November’s appearances in the above list is more or less average. Yet, alongside the months of March and October, November still ranks third. Furthermore, it should be noted that since 2000, the month of November has been negative five times, and positive 15 times. In retrospective, the chance of the month of November being positive stands at 3:1, which is remarkable.
In the beginning, we mentioned that the month of November typically falls into the most positive time period of the year. Let us therefore dare to look ahead to December. Yet, we would like to re-iterate that we do not wish to make concrete proposals at this point. Finally, it should also be mentioned that the month of December can be regarded as a “sure-fire success” on stock markets. Still, we should not forget that the latter have, just like life itself, always some surprises ready for the daydreamers. Hence, even the month of December could be truly negative. At this point, we would only like to remind readers of December 2018, which closed with a minus of 10%. The table below serves as a comparison with the month of November:
Source of data: www.finance.yahoo.com
