We have entered December, the 12th month of the year, which happens to be my favorite month! It's summer here in Australia, meaning the days are warm and long. This gives me plenty of time to play golf in the afternoon… and let's not forget that Santa comes to town!
More importantly, stocks tend to perform well in December.
Here’s the chart:
(right-click and open image in new tab to zoom in)
Let's break down what this chart shows:
This blue line represents the average return for December since 1950 for the S&P 500.
The Takeaway: Yesterday, I shared a note about the current bull market, highlighting its potential for further growth as it is currently below average in both return and duration. One piece of the puzzle was that seasonality is a tailwind, as stocks generally perform well heading into the end of the year.
December typically starts out flat then stocks begin to take off around mid-month. On average, December sees a gain of 1.49% (second best month of the year), with 70% of the days withapositive gain.
The S&P 500 price trend has been outperforming the historical seasonality, with 2024 shaping up to be one of the best years for stocks during an election year.
I anticipate this upward trend and seasonal outperformance will continue.
