History Says These Are the Market’s Best Months

In this segment of “The Morning Show” on Motley Fool Live, recorded on Dec. 13, Fool senior analyst Jim Gillies and advisor Jim Mueller examine the best months for market returns over the past 70 years.

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Jim Gillies: I had a chance to go through and look at monthly returns, just break up the month of the year, and I went back, it was 70 years, went from 1950-2020. I can share this because if I can pull it up here. But basically, I made this chart so I’m allowed to share. We’ll just try to hopefully make this work. You guys can tell me if this gets shown. We’re good? Seventy years and the average return over the 70 Januarys, over the 70 Februarys. It was written to show a lot of people think that the worst month for market returns is October because of course we remember Black Monday and Black Tuesday and whatever other black days they refer to.

But the markets in 1929, crashed in October and the markets in 1987 crashed in October and October 2008 was no party I’m going to tell you that although the worst was in September, but this chart here shows the averages.

The ones in red are negatives and the ones in green are the ones that are over 1%. You can see how November, December historically have been the best months for the market, and when I wrote it, it’s like Fools, this is just what history tells us. It doesn’t mean this year is going to be similar. They could just be down. The market could go down in November, December. 2021 November was bad, December is bad, so we’re bucking those trends. But again, if you look out over the averages.

Jim Mueller: The S&P for November is actually pretty close to flat.

Gillies: Did it actually go flat? Well, that then gets me to and I can’t share this one because it’s not my chart. But I think Bill, you may have shared it as well or I might be misremembering. Have you guys seen the market breadth? The Nasdaq, S&P are barely down for the year. But the average name is 35% off it’s high. That says the MANAMANA companies are doing yeoman’s work because they are about 25 to 28% of the S&P, they’re about for 45-50% of the Nasdaq. Without MANAMANA.

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