November marks the start of the "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 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:
S&P 500 since 1928:
Nasdaq Composite Index since 1971:
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