Trading Calendar

The following chart shows the average year-to-date percentage change in the S&P 500 Index for the entire calendar year since 1950, for 1950-1989 and since 1990. The year consists of trading days 0-252, with day 0 representing the closing price from the prior year. Although some years have 253 or 254 trading days, we do not include these days because most years do not. We make the following adjustments for two anomalous years:

For 1968 we insert several dummy trading days with the same closing levels as immediately preceding days to avoid calendar misalignment because of unusual non-trading days.

For 2001, we insert four dummy trading days after 9/10/01 with the same closing level as 9/10/01 to avoid calendar misalignment for the balance of that year due to the interruption of market activity during September 2001.

The chart shows that, on average, the S&P 500 index:

Rises for roughly the first third of the year (with performance at the beginning of this phase weaker in the recent subsample).

Flattens or fades for several months in the middle of the year (with performance during this phase weaker in the recent subsample).

Lifts off for the last two or three months of the year.

For 1950-2011 (1990-2011), the S&P 500 Index has finished in the black 45 (16) years and in the red 16 (7) years.

In summary, there is some evidence that the stock market has three underlying phases across the calendar year, with gains early and late as bookends for mid-year doldrums.

We have applied the same methodology for the 1990-present subsample to calculate the average month-to-date percentage change in the S&P 500 index by trading day during the individual months of the year, all constructed to the same scale for comparability. For individual monthly profiles, see:

For a summary of research on calendar-related stock market behavior, see the Calendar Effects category.