Random Thoughts from the CIO

Month to date through November 5, the S&P 500 gained 1.2%, closing near the 3075 level.

Despite this strong start, history hints that investors may still be underestimating just how high the market could climb by year-end.

Like 28 other times since 1945, the S&P was up in both January and February of this year. Full-year total returns for these occasions averaged 24%, rising 100% of the time.

During the final two months of these years, the S&P 500 posted an average advance of almost 5%. However, whenever a new all-time high was recorded in November, as was the case this year, the average two-month return jumped to nearly 6.5%, recording a positive performance 11 of 11 times.