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.