What Advisors Can Learn From the Biggest Q4 Moves
With that in mind, it might be helpful to look at some statistics compiled by Sam Stovall, U.S. equity strategist at S&P Capital IQ. In a recent note, Stovall revealed that, since 1945, the S&P 500 has risen 77% of the time in the fourth quarter. Whats more, the average move was a gain of 3.8%.
Of course, in investing there are no guarantees. Sometimes, the fourth quarter is dismal. Weve started this Q4 on a high note, with S&P 500 closing up 8.3% in October, its best month since October 2011.
What follows are statistics from S&P Capital IQ on the fourth-quarter performance of the index in the best and worst final periods since 1945.
The wide range of results, from up 20.9% to down 23.2%, should be Exhibit A for advisors whose clients want to change asset allocations. Even though most fourth quarters are positive, the influence of external events can affect short-term results. The real takeaway for clients is that stocks have risen far in excess of inflation over the long term.Joseph Lisanti
Click through to see the slideshow, or view a web only version here
S&P 500 Best Fourth Quarter Since 1945
S&P 500 Second-Best Fourth Quarter Since 1945
S&P 500 Third-Best Fourth Quarter Since 1945
S&P 500 Fourth-Best Fourth Quarter Since 1945
S&P 500 Fifth-Best Fourth Quarter Since 1945
S&P 500 Worst Fourth Quarter Since 1945
Image: AP