'Tis the Season
Does the holiday season reward investors? While past performance does not guarantee future results, it's important to recognize the historical impact of seasonality.
Does the holiday season bring gifts to investors? Statistically speaking, it has historically.
- While past performance is not indicative of future results, seasonality is worth acknowledging. Over the past 30 years, the holiday season from November 1st through December 31st has historically been a notably strong period for U.S. equity performance, as shown in the chart above. In that period, the S&P 500 increased nearly 4% on average over those combined two months, posting positive returns more than three-quarters of the time. For small cap stocks, measured by the Russell 2000, the historical results are even stronger with November and December posting the best consecutive performing months, on average.
- Over the past three decades, August and September have been the weakest months for U.S. small- and large-cap equities. This two-month stretch often features thin summer liquidity and a late-third-quarter earnings-preannouncement window, when companies are more likely to lower full-year guidance.
- One driver of year-end strength is investors’ heightened focus and upbeat sentiment toward next-year’s earnings, as we believe analyst projections tend to be relatively optimistic at this seasonal juncture before gradually adjusting lower in the following quarters as more information emerges. While we strongly encourage investors to take a long-term view, it is nice to recognize that we are entering a potentially joyous season for the U.S. stock market.
The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of November 2025. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.
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Russell 2000® Index: Measures the performance of the small-cap segment of the U.S. equity universe. Index performance does not reflect deductions for fees, expenses, or taxes. After March 24, 2025, FTSE Russell implemented a new methodology capping individual companies at no more than 22.5% of the index and capping companies that have a weight greater than 4.5% in aggregate at no more than 45% of the index. Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies. “FTSE®” “Russell®”, “FTSE Russell®”, “FTSE4Good®”, “ICB®”, “Mergent®, The Yield Book®,” are trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. S&P 500® Index: An index of large company stocks considered to be representative of the U.S. stock market. Index performance does not reflect deductions for fees, expenses, or taxes. The S&P indexes are a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Fred Alger Management, LLC and its affiliates. Copyright 2025 S&P Dow Jones Indices LLC, a subsidiary of S&P Global Inc. and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. Investors cannot invest directly in any index. The performance data quoted represents past performance, which is not an indication or a guarantee of future results.
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