Seasonal Analysis: Equities Tend to be Well Received in November

Seasonal Analysis: Equities Tend to be Well Received in November




by Ryan Detrick, LPL Research

The Thanksgiving Day holiday can be an enjoyable experience for many as friends and family are celebrated while eating a delicious meal. November also can be enjoyable for those who follow the seasonal statistics for the equity markets; looking back over the past 20 years, stocks tend to move higher during the month.

Our latest analysis identified four sectors that have shown a seasonal tendency to outperform the S&P 500 Index during November over the last 20 years—a month when the index has on average moved higher by 1.5%, generating positive returns 75% of the time. As we review the data, it’s important to note that non-seasonal factors still influence performance and should not be ignored.

The table below highlights sectors’ average over- and under-performance versus the S&P 500 during November since 1997, as well as the top-performing industry groups over the same time period:

Looking at the table above, the materials sector has tended to exhibit the highest relative strength versus the index in November, on average. This increases the likelihood that the upward trajectory may continue. But, if you are looking for a more targeted strategy this month, out of the top 10 industry groups, the industrials sector has the most breadth, represented by four seasonally strong components.

As many of us enjoy the Thanksgiving Day holiday this year, maybe we can focus more of our attention on our friends and family and less on the equity markets; historical data suggests stocks are more likely than not to move higher in November.  However, seasonal statistics could help to identify sectors and industries that could better compliment your Thanksgiving meal than a broad-based equity investment.

IMPORTANT DISCLOSURES

Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

The economic forecasts set forth in the presentation may not develop as predicted.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Stock investing involves risk including loss of principal.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Because of their narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

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Tracking # 1-663249 (Exp. 11/18)