We are now two weeks into the fourth quarter of the 2013 investing year, and we could be headed for good days ahead. Certainly, the history of the stock markets shows that, in the long run, the fourth quarter is the best time of the year.
Consider that the S&P 500 index, since 1945, has returned an average of 0.7 percent per month. But in just the fourth quarter, the months of October, November and December, it has returned an average of 1.3 percent per month, nearly double the normal rate.
This phenomenon isn't confined to the United States. The MSCI EAFE index, which tracks the world's developed markets, shows exactly the same figures: an 0.7 percent average return in all months, but 1.3 percent in the fourth quarter. The MSCI Emerging Markets index is even stronger, with a 1.0 percent monthly return overall, but 1.9 percent in the fourth quarter.
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