by Scott Krisiloff, CFA, Avondale Asset Management
Iāve heard this data mentioned by others in the past few days, but havenāt actually seen it anywhere, so I decided to put it together for myself. Ā Based on the anecdotes from others, I knew that the last two months of the year are generally good when the market has been up by 10% or more in the first 10 months. Ā What I didnāt realize was that good may be an understatement. Ā The last two months of the year are generally greatĀ when the market has been up a lot already in the first ten months.
Below is a list of all the times that the S&P 500 has risen by more than 10% in the first 10 months of the year. Ā On average the index has risen by another 4.5% over the final two months. Ā Of the 24 times that this has happened, the index has only fallen in three years, and in those years it has never fallen by more than 70 bps. Ā On the other hand there have also been some monster finishes within the data. Ā In 1985 and 1998 the index was up by more than 11% in the final two months.
Even more amazing, if the year ended right now, 2013 would be only the 11th best year in S&P 500 history. Ā However itās already Ā in 5th place for best first 10 months. Ā Considering how well the index did in other years with this pace, we canāt rule out the possibility of a 30% increase in 2013!
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