The Best and Worst Months for the S&P 500 Index (1926 – 2007)

January 9, 2008

This is an updated version of the post I did last summer.

First off, here’s a look at the monthly total returns for the S&P 500 Index for 2007:

2007 Monthly Returns for the S&P 500 Index

November was by far the worst month! November’s -4.18% return was the worst monthly return since December 2003’s -5.88% return.

From 1926 – 2007, only ONE month has averaged a negative return for the S&P 500 Index*. Can you guess what month that was?

September

That’s right, only September has averaged a negative monthly return every year since 1926. Another way to look at it: although not practical, had you invested your money during just the month of September every year since 1926, you would have had an average monthly return of -.70%!

The best month?

The best month for the S&P 500 Index historically has been July with an average monthly return of 1.80%.

Here’s a complete list ranked by month:

The Best and Worst Months for the S&P 500 Index

Now here’s a look at each month:

The Best and Worst Months for the S&P 500 Index

It’s interesting to note that although the month of December had the greatest number of up months, it’s average performance still lagged the month July.

Finally, for those who are interested, here’s a look at the year in which the best and worst months occured:

The Best and Worst Months for the S&P 500 Index

Notice that most of them occured in the 1930s – evidence of just how volatile the 1930s were (that and it was also probably due to the fact that the index traded for a lot less than it does now, which made each point worth a greater percentage).

One last bit of trivia for you:

From 1926 – 2007, there were 984 months. Of those 984 months, 612 (62%) of them were up months and 372 (38%) were down months.

What’s in store for 2008?

Who knows. But, I will tell you that so far we aren’t off to a good start. The S&P 500 Index is down 5.72% so far this year (and we’re only a week into the new year!).

*From 1926- March 3, 1957, the S&P consisted of 90 stocks. It was expanded to 500 stocks on March 4, 1957.

Source: Appendix B of The Only Three Questions That Count (Affiliate Link) by Ken Fisher and this spreadsheet download from StandardandPoors.com. I entered the data and performed the calculations on my own.

3 responses to The Best and Worst Months for the S&P 500 Index (1926 – 2007)

  1. Hi,

    This post is really interesting. But there is one part that I don’t understand…”That’s right, only September has averaged a negative monthly return every year since 1926. Another way to look at it: had you invested your money during the month of September every year since 1926, you would have had an average monthly return of -.70%!”

    Would you be able to explain a bit more about what this means exactly? Are you saying that if you happen to buy in September of every year, you will never make a positive return on your money? How is that possible?

  2. Do you know of a resource or website out there that will allow one to quickly ascertain the best and worst periods ever for a given security, index, and/or ETF? (i.e. best/worst 1 month period, best/worst 3 month period, best/worst 6 month period, best/worst 12 month period, etc.)

    Thanks!

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