Buy November's Historical Bull Cycle?
Published: Thursday, 1 Nov 2012 | 4:44 PM ET
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Andrew Unangst |
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Stocks got off to a great start
for the month Thursday, with the Dow
[.DJIA 13112.44 --- UNCH (0)
]
posting its largest gain since Sept. 13. After a lousy October, will the market
reverse its course and end the month in the black?
November marks the start of the Stock Trader's Almanac "Best Six Months Switching Strategy," which involves investing in the Dow Jones Industrial Average between Nov. 1 and April 30, and switching to fixed income for the other six months.
Since 1950, November has been the second-best month of the year for the S&P 500 and third for the Dow. Historically, it's also the start of the most bullish months of the year, up to April.
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posting its largest gain since Sept. 13. After a lousy October, will the market
reverse its course and end the month in the black?November marks the start of the Stock Trader's Almanac "Best Six Months Switching Strategy," which involves investing in the Dow Jones Industrial Average between Nov. 1 and April 30, and switching to fixed income for the other six months.
Since 1950, November has been the second-best month of the year for the S&P 500 and third for the Dow. Historically, it's also the start of the most bullish months of the year, up to April.
In the past 12 years, the Dow
posted a gain of 1.24 percent in November, while the S&P 500 and Nasdaq
Composite Index
[COMP 2999.66 --- UNCH (0)
]
have averaged a return of 0.67 percent and 0.22 percent, respectively (The
average for the Nasdaq goes up to 2.32 percent, if you exclude the 23 percent
drop the index suffered in Nov. 2000 during the "tech bubble" burst).
]
have averaged a return of 0.67 percent and 0.22 percent, respectively (The
average for the Nasdaq goes up to 2.32 percent, if you exclude the 23 percent
drop the index suffered in Nov. 2000 during the "tech bubble" burst).The table below highlights the Dow industrial average's performance in November compared to its returns in other months. Since 2000, November has been the index’s fifth-best month.
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Among the major S&P 500 sectors, materials and industrial companies have performed the best in November, with an average gain of 3 percent and 2 percent, respectively.
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