stocks

The Single-Best Trading Week of the Year Starts Now

The strongest five-session stretch for stock market returns is upon us, says LPL Financial Chief Market Strategist Ryan Detrick. November as a whole isn't bad, either.

Long-term investors can sleep through what follows, but tactical investors and traders might want to perk up. That's because we're at the start of the single-best trading week of the year for stocks – at least, historically speaking.

Everyone knows that October and November are two of the market's favorite months. But it just so happens they also contain some short bursts of absolutely tip-top returns, says LPL Financial Chief Market Strategist Ryan Detrick.

Oct. 28 was the longtime champ for single-day performance – that is until it face-planted more than 3% in 2020. As a result, it ceded its reign as king of the day-trading hill to Oct. 27.

But don't feel too bad for Oct. 28. It's still a great day for stocks, explains Detrick, as are Oct. 29, Nov. 2 and Nov. 3.

Chart

LPL Financial

"I'd like to think it has something to do with my birthday being on Oct. 28, but the truth is bulls should be aware that the coming days are historically some of the best of the year," Detrick says.

Autumn Is a Great Time for Stocks

Indeed, the strategist says the single best day to buy at the close and hold for the next five trading days is today, Oct. 27.

Chart

LPL Financial

"Yes, these five days were lower last year by 0.6%, but you have to go back to the late 1960s to see the last time they were down two years in a row," adds Detrick.

Which brings us to November. Since 1950 – and over the past 10 years – it has been the top month for market returns.

"November is the best month of the year, but it doesn't seem to get nearly as much love as you'd think," Detrick says. "We all assume December is the best month, but November is actually better and gets very little fanfare. Maybe it should be a month for the bulls, not for turkeys."

Chart

LPL Financial

As good as November has been for investors since 1950, it's actually not that big a deal when we delve much farther into the past. Since 1928, November's average price change comes to just +0.9%, according to Yardeni Research. That ranks it as only the fifth best month for the S&P 500. 

December – so beloved by investors – has done a better job, but it's still merely the market's third best month since 1928. The final month of the year boasts an average price change of +1.3%.

If we're talking about really long investing horizons – in this case over the past 93 years – the market's top month is July, hands down. Maybe it's because the dog days have yet to set in, but everyone's favorite summer span sports an average price change of +1.6% since 1928. 

It's not clear why July has historically been so good to the market. Perhaps it just likes to troll those who sell in May.

Most Popular

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA
IRAs

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA

Traditional IRAs are set up in a way that basically incentivizes you (and your heirs) into paying the highest tax bill possible. Don’t fall for it. Co…
July 4, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Retirees, Make These Midyear Moves to Cut Next Year's Tax Bill
Tax Breaks

Retirees, Make These Midyear Moves to Cut Next Year's Tax Bill

Save money next April by making these six hot-as-July tax moves.
July 1, 2022

Recommended

Stock Market Today (7/5/22): Energy Dampens Dow, FAANGs Elevate Nasdaq
Stock Market Today

Stock Market Today (7/5/22): Energy Dampens Dow, FAANGs Elevate Nasdaq

Recessionary fears weighed on oil and economically sensitive sectors Tuesday, while declining Treasury yields lifted tech-esque stocks.
July 5, 2022
Stock Market Today (7/1/22): Stocks Catch a Second Wind to Start Second Half
Stock Market Today

Stock Market Today (7/1/22): Stocks Catch a Second Wind to Start Second Half

Despite a dour ISM manufacturing index reading Friday, stocks broadly managed to pull themselves together and finish well in the black.
July 1, 2022
Stock Market Today (6/30/22): S&P Suffers Worst First Half Since 1970
Stock Market Today

Stock Market Today (6/30/22): S&P Suffers Worst First Half Since 1970

The major indexes produced a familiar result Thursday, finishing in the red to close out a dreary first six months of the year.
June 30, 2022
Can AI Beat the Market? 10 Stocks to Watch
stocks

Can AI Beat the Market? 10 Stocks to Watch

An artificial intelligence (AI) system identifying high-potential equities has been sharp in the past. Here are its 10 top stocks to watch over the ne…
June 30, 2022