Stocktake: The most wonderful time of year for investors

Stocks have been strong in recent weeks and seasonal factors suggest further gains are coming.

The S&P 500 gained almost 7 per cent in October, its best month since November 2020. Such momentum augurs well for stocks, says Bespoke Investment, which says strong months beget strong months.

LPL Research's Ryan Detrick agrees "strength is a bull's best friend". He found eight previous instances where the S&P 500 was up more than 20 per cent coming into November. On each occasion, stocks continued to gain in November and in the final two months of the year, generating above-average returns.

Drawdowns also tend to be insignificant. Sundial Capital Research examined market returns from early November to the end of the year. Since 1953, many years (42 per cent) saw a drawdown of less than 1 per cent; 85 per cent saw a drawdown of less than 5 per cent; while 95 per cent saw a drawdown of less than 10 per cent.