November usually marks a return to stronger stockmarkets

4 November 2014

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

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