Market Seasonality Trends
Janurary
“The January Effect”
Historically positive
Small-cap stocks often outperform because
investors reinvest after December tax-loss selling
Average: +1.2 % (since 1950, S&P 500)
April
"One of the Best Months"
Strongest month historically
Investors position ahead of Q1 earnings season
and new-year inflows still active
Average: +1.5 % to +2 %
July
Consistently strong
Q2 earnings optimism lifts sentiment
Average: +1.5 % to +2 %
February
Quiet or slightly negative
Often a pause after January’s rebound
Average: –0.1 % to +0.2 %
March
Modestly positive
Markets stabilise as Q1 earnings
expectations settle
Average: +1 % to +1.5 %.
May
“Sell in May and Go Away”
Beginning of the weak mid-year period
Performance flattens as summer comes
Many funds take profits here
anticipating lower summer volume
Average: ~ 0 %
June
Often soft or flat
End-of-quarter portfolio rebalancing
creates volatility
Average: –0.1 % to 0 %.
August
Weak
Low trading volume and geopolitical flare-ups often spark volatility
Average: –0.6 % to –1 %.
September
"The Worst Month"
Statistically the most negative
Mutual funds sell to lock in gains or harvest losses before fiscal year-end
Average: –0.7 % to –1.1 %
October
“Bear Killer Month"
Historically a turning point
Many market bottoms have formed here (1929, 1987, 2008)
Average: +0.8 % to +1 % overall.
November
"Holiday Rally Begins"
One of the strongest months.
Markets price in year-end consumer spending and the “Santa Claus Rally.”
Average: +1.5 % to +2 %
December
"Santa Claus Rally”
Strong and steady
Institutional window-dressing and
holiday optimism drive gains
Average: +1.3 % to +1.5 %.