November: A Historically Strong Month for Stocks
Author: Montecito Capital Management
As we move into November, history offers a reason for cautious optimism. Looking back nearly a century, this month has delivered the strongest average returns of the year for the S&P 500 – about +1.6% on average and +2.0% median return since 1929.
While no one should rely on the calendar to predict markets, it’s a pattern that has held through many different eras—through wars, recessions, and bull markets alike. The rhythm of investor behavior, corporate reporting, and year-end sentiment often combine to make November a turning point for stocks.
While no one solely should rely on the calendar to predict markets, it’s a pattern that has held through many different eras—through wars, recessions, and bull markets alike. The rhythm of investor behavior, corporate reporting, and year-end sentiment often combine to make November a turning point for stocks.
Why November Often Outperforms
Several factors tend to align in the market’s favor as the year winds down:
- Earnings clarity: By early November, most companies have reported third-quarter results, giving investors a much clearer picture of corporate profits and future guidance. That improved visibility often helps stabilize sentiment.
- Investor optimism: The final stretch of the year tends to spark renewed confidence. Investors begin to look toward the coming year, encouraged by holiday spending, fiscal planning, and the sense of a “fresh start” ahead.
- Institutional activity: Many pension funds and large asset managers rebalance or reinvest cash late in the year, adding natural demand for equities.
- Seasonal strength: Historically, the six-month span from November through April has been the market’s most productive period—sometimes called the “best half” of the year.
Again, while no single factor guarantees results, these forces often reinforce each other, helping November stand out over time.
From September’s Slump to November’s Lift
November’s strength also stands in contrast to September, which remains the market’s weakest month on average. The difference between these two months has been remarkably consistent. September often brings portfolio trimming, tax-loss harvesting, and mutual fund distributions that can weigh on prices. By the time November arrives, much of that selling pressure has passed, paving the way for renewed buying and a steadier tone.
Putting Today in Perspective
Every year has its own story. This November begins against a backdrop of shifting interest rate expectations, moderating inflation, and resilient corporate earnings. While those fundamentals will ultimately dictate the outcome, history reminds us that the final stretch of the year often favors investors who stay invested and focused on the bigger picture.
The takeaway isn’t to chase seasonality, but to stay consistent. Markets tend to reward patience and discipline far more than perfect timing. As we enter this historically favorable period, it’s an opportune time to review portfolios, confirm that risk levels align with long-term goals, and ensure strategies remain positioned for the years ahead.
If the past is any guide, November’s seasonal strength can serve as both a reminder and a reassurance: optimism, grounded in discipline, continues to be a sound investment principle.
From another perspective, the S&P 500’s year-to-date gain of roughly 16.6% through October offers additional reason for optimism as we enter the final two months of the year. According to research from Carson Investment Research, when the index has already gained more than 15% by the end of October, history has been remarkably consistent: in 20 out of 21 instances since 1950, the S&P 500 went on to finish the year higher by an additional 4.7% on average. The lone exception was 2021, a year marked by tightening monetary policy and an early rotation out of growth stocks.
This pattern makes intuitive sense. Strong early-year gains often reflect improving economic data, rising corporate earnings, and positive investor sentiment — trends that tend to persist unless disrupted by a major shock. In other words, momentum tends to beget momentum: when investors have already enjoyed solid returns by late fall, the combination of year-end optimism, institutional buying, and holiday-season confidence often provides an added lift into December.
There’s also a behavioral element at play. As markets strengthen, investors who stayed on the sidelines earlier in the year frequently re-enter to avoid missing further upside. Meanwhile, portfolio managers aiming to meet benchmarks or performance goals may add equity exposure before year-end. These actions collectively help sustain the upward bias that strong years often exhibit through November and December.
While past performance never guarantees future results, the historical pattern suggests that strong years tend to finish strong — particularly when underlying fundamentals remain supportive. With November now underway, that precedent adds context to an already encouraging seasonal backdrop.
And that’s where professional guidance matters. Having an experienced investment advisor managing your portfolio can make a meaningful difference — not by trying to time seasonal trends, but by ensuring that allocation, diversification, and discipline remain aligned with your long-term goals. A fiduciary advisor can help navigate periods of volatility, rebalance portfolios at the right time, and keep emotions from driving short-term decisions. In strong markets, that means helping you stay invested to capture opportunity; in weaker markets, it means maintaining perspective and protecting progress already made.