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Bulls Ran Over October, Ready for November?

AP

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 industrials. Historically, it's also the start of the most bullish months of the year, up to April.

Did the stock market rally start a month early? The S&P 500 is on track to close October up 13.6 percent, its best monthly performance since October 1974, when it rose 16.3 percent.

The Dow industrial average is also on pace for its best monthly gain since January 1987, up 12 percent, and best point-increase on record, up 1317.73 so far this month.

In the past 11 years, the Dow industrials has posted a gain of 1.28 percent in November, while the S&P 500 and Nasdaq Composite Index have averaged a return of 0.78 percent and 0.45 percent, respectively.

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.



Among the major S&P 500 sectors, materials and industrial companies have performed the best in November, with an average gain of 3.36 percent and 2.18 percent, respectively.


Historic Performance in November

Dow industrials since 1896:

  • On average, the Dow industrial average has gained 1.06 percent during November
  • Up 60 percent of the time
  • The best November was in 1928, when the average rose 16.35 percent
  • The worst November was in 1937, when the average fell 14.04 percent
  • November ranks as the fourth best month out of the year for the Dow industrials
  • On average, the Dow industrial average has increased 1.17 percent during November when October was a positive month, up 60 percent of the time

S&P 500 since 1928:

  • On average, the S&P 500 has gained 0.78 percent during November
  • Up 57 percent of the time
  • The best November was in 1928, when the index rose 11.19 percent
  • The worst November was in 1973, when the index fell 11.39 percent
  • November ranks as the fifth best month out of the year for the S&P 500
  • On average, the S&P 500 has increased 0.99 percent during November when October was a positive month, up 57 percent of the time

Nasdaq Composite Index since 1971:

  • On average, the Nasdaq index has gained 1.62 percent during November
  • Up 65 percent of the time
  • The best November was in 2001, when the index rose 14.22 percent
  • The worst November was in 2000, when the index fell 22.9 percent
  • November ranks as the third best month out of the year for the Nasdaq index
  • On average, the Nasdaq index has increased 3.67 percent during November when October was a positive month, up 67 percent of the time


Ideas for By The Numbers? Send them to giovanny.moreano@nbcuni.com

Symbol
Price
 
Change
%Change
DJIA
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S&P 500
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NASDAQ
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