Summary

The long-term upward trajectory in the U.S. stock market has its foundation in the country’s democratic political system (remember to vote today!) and its market-based, capitalist economic system. In theory, the stock market efficiently allocates the nation’s capital to generate solid investment returns. Theory typically turns into reality in November, which since 1980 has been the best month for equity performance, with an average 2.1% gain, ahead of April (+1.60%), July (+1.4%) December (+1.3%), and October (+1.3%). November’s batting average is high as well: stocks advance during the month 72% of the time. The best Novembers have been 1980 (+10.2%), 2001 (+7.5%), 1996 (+7.3%), 1985 (+6.5%), 1998 (+5.9%), and 2002 (+5.1%). But there have been some clunkers: 2000 (-8%), 2008 (-7.5%) and 1987 (-5.9%). Last year, the S&P 500 rose an impressive 8.9% for the month. What about during presidential-election years? Good question. The track record is even more impressive here. For the 11 election-year Novembers since 1980, stocks have, on average, climbed 2.6%. November