Key Points:
- A very strong first 10 months of the year has led to better-than-average returns in November/December.
- Since 1900, in 33 years when the DJIA has gained 15%+ in the first 10 months of the year, November averages a 2.7% gain and December averages a 2.2% gain. This is much better than the November and December averages of 0.4% and 0.8%, respectively, in all other years.
- A very strong annual gain, however, does not lead to better or worse average returns the following year.
- Since 1900, in 34 years of a 20% DJIA annual gain, the following year averages a 7% gain, versus an 8% gain for all other years.
- The current market leg on the DJIA of 8% is still well below the bull market average up leg of 14% and median of 11%.
- The current shift of styles to value outperformance is similar to the conclusion of the 2011–2012 and 2015–2016 corrections. In those cases, it persisted for 2–3 quarters before fading.
