November usually marks a return to stronger stockmarkets
Since 1970 the FTSE All-Share index has risen in November in 59% of years, returning 0.3% on average over the month. This performance makes November the sixth best month for returns.
Its relative performance increased steadily from 1980, but the trend reversed in 2006. The market has risen only twice in November in the past eight years.
Although the performance of the market in November is only average, the month marks the start of a strong six months (November to April) for the market. Having reduced exposure to equities in May (the 'sell in May and go away' principle), investors should increase their market exposure in November.
On average the market rises in the first three days of the month, gives up those gains over the following few days, rises again, falls back once more and finally increases quite strongly over the final seven trading days of the month.
Sectors to look out for
Over the past 20 years the sectors that have been strong in November have included beverages, electronic and electrical equipment, food producers, life insurance, media, mining, technology, hardware and equipment, and travel and leisure.
Relatively weak sectors include aerospace and defence, banking, general industrials, oil and gas production, real estate and investment trusts. November is usually a strong month for gold, and weak for sterling relative to the dollar.
A couple of notable anniversaries occur this month. On 14 November it will be seven years since Tesco's share price hit its all-time high, while 12 November will be the 30th anniversary of the replacement of one pound notes with coins.
This article was written for our sister website Money Observer
Generally thought of as being interchangeable with life assurance, but isn’t. Life insurance insures you for a specific period of time, at a premium fixed by your age, health and the amount the life is insured for. If you die while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term or cease paying the premiums, the policy is finished and has no remaining value whatsoever as it only has any value if you have a claim. For this reason, life insurance is much cheaper than life assurance (also called whole of life).
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).