Almanac Trader: November Top Performing DJIA Month in Election Year
* October 27, 2016
November begins the “Best Six Months” for the DJIA and S&P 500, and the “Best Eight Months” for NASDAQ. Small caps come into favor during November but don’t really take off until the last two weeks of the year. November is the number-three DJIA and number-two S&P 500 month since 1950. Since 1971, November ranks third for NASDAQ. November is best for Russell 1000 and Russell 2000 second best since 1979.
November maintains its status among the top performing months as fourth-quarter cash inflows from institutions drive November to lead the best consecutive three-month span November-January. The month has taken hits during bear markets and November 2000, down –22.9% (undecided election and a nascent bear), was NASDAQ’s second worst month on record—only October 1987 was worse.
November’s is a mixed bag in presidential election years. DJIA has advanced in 9 of the last 16 election years since 1952 with an average gain of 1.5%. Significant DJIA declines occurred in 2008 (-5.3%) and 2000 (-5.1%). For S&P 500 November ranks second with a similar record to DJIA. NASDAQ, Russell 1000 and Russell 2000 are not as strong ranking #8, #6 and #8 respectively. Fewer years of data (11 for NASDAQ and 9 for Russell indices) combined with sizable losses in 2000 and 2008 drag down rankings and average gains.
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