December Is Historically One of the Best Months of the Year For The Markets

The rumors are true - December is historically a very strong month for the markets.

"Santa Claus rally"? "The December Effect"? Whatever you want to call it, the markets have historically performed VERY well in December.

How well?

Let's look at the numbers:

Going back to 1929, the Dow Jones Industrial Average (DJIA) is up an average of 1.42% in the month of December.

That's a strong number, but the Nasdaq and S+P 500 have performed even better.

Since 1971, the S+P 500 is up an average of 1.64% in the month of December.

The Nasdaq tends to perform the best in December, as it is up an average of 1.89% since 1971.

The market strength tends to spill over into January, making December and January two very good months to be invested in the markets.

Sources: Dow Jones Historical Data

Nasdaq Historical Data

S+P 500 Historical Data