Today marks the first day of the fourth quarter, which is generally a good period for investors. According to research from the Bespoke Investment Group, the S&P 500 has averaged a 2.6 percent gain in the final three months of the year since 1928 – which is more than 10 percent on an annualized basis. In that time frame, the fourth quarter has posted a positive performance 72 percent of the time.
These trends have held up in recent years. Since 2009, the S&P 500 has risen in four out of five fourth quarters, all except for 2012. The S&P 500 has risen by at least 10 percent in three of the past four fourth quarters.
This is also a midterm election year, and for whatever reason, stocks have performed even better during fourth quarters of those years. The S&P 500 has averaged a 6.5 percent gain in the final three months of the 21 midterm election years since 1928, and has been positive in 18 of those 21 years.