If a 70-year tendency holds true this year, the balances of Americans’ 401k’s and other investment accounts should be fatter around the New Year. The Dow Jones Data Group analyzed market returns going back to 1950 and found that when the Dow Jones Industrial Average and the S&P 500 index are up a sizable amount at the end of October, as indeed they were this year, positive returns for the rest of the year are in the cards. The authors characterized the gains as “remarkably stellar”. Specifically, when the Dow is up by at least 15% in the year to date through the end of October, the index has been 15-0 for November and December, tacking on an average additional return of 5.55%. The worst gain was +0.97%, the best +14.84%, with most being in the +4% to +6% range. Since the Dow was up 15.9% and the S&P 500 was up 21.2% at the end of this October, the year 2019 is qualified for admission to the party. Of course nothing is guaranteed, but the odds sure are attractive!
Nothing is guaranteed, but the odds are attractive!
| November 04, 2019