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  • Writer's pictureRealFacts Editorial Team

History Signals Possible Upcoming Market Slowdown

graph of the market

Historically, the market has shown lower performance during the months of May to October in comparison to the November-April period. This occurrence led to the age-old saying, "Sell in May and go away". Dow Jones Market Data reveals an average gain of 5.2% during the November-April period, more than double the 2.1% rise seen in the May-October cycle. This trend has intensified since 1950, with a significant 7% increase during the November-start cycle versus a modest 1.7% for the May-start cycle. While the last decade has shown slightly less dramatic results, the November-April period still outperforms, with gains of 5.5% compared to 4% in the other six months, a gap that has widened slightly over the past five years. The recent 22% increase in the S&P 500 since the end of last October indicates a continuation of this trend, marking the strongest November-April stretch since 2020-2021.

While this trend has been observed in the past it doesn't guarantee its occurrence in the upcoming period. Kimberley Koenig, an author at Investors Business Daily, highlighted the significant impact that election years can have on this trend. She wrote, “During election years, the average S&P 500 performance for May through October has tallied 4.2%. This far outperforms the 2.6% rise in the pre-election year, the 2.1% increase in the post election year and a drop of 0.5% in the midterm year.” If this trend remains consistent, we can anticipate increased volatility in the months leading up to the 2024 election.

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