November is widely regarded as part of a historically favorable period for U.S. stocks, often leading a multi-month stretch (roughly November through April) that has delivered stronger than average returns than other parts of the year.
Why November tends to be strong
- Seasonal patterns: The November to April period has produced some of the market’s best 6-month spans on average, driven by a combination of demand seasonality (inflows around year-end, tax-related rebalancing, and investment flows tied to performance bonuses) and a natural market momentum that often carries through the holiday season. This period has historically shown higher probability of positive returns than the rest of the year.
- Post election dynamics: Following U>S> elections, markets frequently settle into a more predictable policy environment or at least a period of clarity regarding fiscal and monetary directions. This clarity can reduce uncertainty and lift risk appetite, contributing to a positive bias into year-end.
- Tax considerations and year-end rebalancing: Investors and funds often rebalance portfolios in the fourth quarter, shifting toward equities or certain sectors that performed well in the year, which can provide a lift to broad indices and selected groups.
- Value of earnings season spillover: As companies report third quarter results in October and November, constructive earnings trends or guidance can reinforce positive sentiment into the end of the year and beyond.
What historically helps November performance
- Broad markets generally benefit when inflation remains on a slowing trajectory and central bank policy signals support of a gradual path to lower rates or a steady stance, reducing discount rate pressure on equities.
- Sectors with seasonal strength often lead the charge around Thanksgiving and into year-end:
- Consumer discretionary and technology frequently show resilience as consumer spending remains a key driver of GDP (Gross Domestic Product) in many quarters.
- Omdustrials and financials can also contribute, particularly when economic activity remains steady and credit conditions remain favorable.
- Smaller-cap equities sometimes outperform during the November to April window as investors seek cyclical recovery plays and liquidity conditions improve.
Some November Guidance
- Stay diversified: Maintain a balanced mix of core holdings, broad index exposure, and a thoughtful tilt toward quality and durable earnings.
- Stay focused on fundamentals: Favor companies with sustainable margins, strong cash flow, and prudent capital allocation, which trend to fare better during volatile periods and through seasonally strong months.
- Intentional rebalance: Use year-end windows to realign portfolios with long-term goals, tax considerations, and risk tolerance, rather than chasing short-term moves.
- Maintain a long-term perspective: Seasonal effects can enhance returns, but the market’s primary driver remains long-term fundamentals, valuations, and disciplined risk management.
For our clients at Meikle Financial Group, we are watching these factors for you and adjusting as necessary. Enjoy family, friends, and the holidays during this wonderful season for thanks, grace, and reflection.
Securities offered through Cetera Wealth Services LLC, Member FINRA/SIPC. Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Cetera is under separate ownership from any other named entity.
Cetera Wealth Services LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business.
A diversified portfolio does not assure a profit or protect against loss in a declining market.
Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss.
Rebalancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.
The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Wealth Services, LLC cannot guarantee or represent that it is accurate or complete.
