Last month’s chart highlighted that September has been the worst month for stocks (see Dow Jones Average Monthly Gain).
As it turned out, September 2020 was a difficult month (Dow down 4.4% so far).
Looking forward, today’s chart illustrates that the S&P 500 has tended to trade higher in October.
In fact, a turn around in October has tended to be followed by some of the strongest calendar months of the year.
What is the S&P 500’s average monthly gain?
Since 1950, the S&P 500 has gained 0.7% per calendar month on average.
What was the S&P 500’s largest monthly loss?
The largest calendar month loss for the S&P 500 since 1950 was 21.8% for the calendar month of October 1987.
What was the S&P 500’s largest monthly gain?
The largest calendar month gain for the S&P 500 since 1950 was 16.3% for the calendar month of October 1974.
What is meant by the stock market adage, ‘Sell in May and walk away’?
Sell in May is based on the stock market’s tendency to underperform for the six calendar months of May through October and outperform from November through April.