The Weekly Brief (07 December 2015)Contributor Global Markets Insights Strategy Team
Will December be a good month for equities? History would suggest it could well be. Over the last 20 years equities have tended to have a good month in December, the famous "Santa rally".
UK equity returns in December have only been negative twice in the last twenty years, leaving the market positive an incredible 90% of the time. European equities have experienced only four negative Decembers and the US five over the same 20 year period. The average December return has been 2% in the UK, 2.4% in Europe and 1.4% in the US. Given the regularity of strong Decembers, it’s a brave fund manager who is underweight in the final month of the year just before their year’s performance is finalised, which probably goes some way to explaining the phenomenon.
Don’t short Santa
Equity market price returns in December
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The value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Past performance is not a guide to the future.