The S&P 500 fell almost 7% in the third quarter. Combined with recent volatility, the decline prompted many worried investors to contact their advisors. Even though most advisors caution clients not to be concerned with short-term results, many investors continue to view performance that way.

With that in mind, it might be helpful to look at some statistics compiled by Sam Stovall, U.S. equity strategist at S&P Capital IQ. In a recent note, Stovall revealed that, since 1945, the S&P 500 has risen 77% of the time in the fourth quarter. What’s more, the average move was a gain of 3.8%.

Of course, in investing there are no guarantees. Sometimes, the fourth quarter is dismal. What follows are statistics from S&P Capital IQ on the fourth-quarter performance of the index in the best and worst final periods since 1945.

The wide range of results, from up 20.9% to down 23.2%, should be Exhibit A for advisors whose clients want to change asset allocations. Even though most fourth quarters are positive, the influence of external events can affect short-term results. The real takeaway for clients is that stocks have risen far in excess of inflation over the long term.—Joseph Lisanti

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S&P 500 Best Fourth Quarter Since 1945

The dot-com bubble was inflating in 1998. In November, went public and posted the largest first-day gain for an IPO up to that point.

S&P 500 Second-Best Fourth Quarter Since 1945

Stocks rallied in August after more than a decade of back and forth action that left major indexes virtually unchanged. By the fourth quarter, investors were coming back to stocks. October was the second-best month that year and November and December were also in the plus column.

S&P 500 Third-Best Fourth Quarter Since 1945

Mergers and acquisitions, many financed by junk bonds, drove the market higher that year. Toward the end of 1985, Goldman Sachs estimated that 70% of the market’s gain since the beginning of 1984 was the result of M&A activity.

S&P 500 Fourth-Best Fourth Quarter Since 1945

The technology bubble was still inflating in 1999. The average tech IPO that year more than doubled in its first month of trading.

S&P 500 Fifth-Best Fourth Quarter Since 1945

The Cuban missile crisis essentially ended on October 28, and the relief rally that followed saw November post the biggest stock market gain of the year.

S&P 500 Worst Fourth Quarter Since 1945

Investors with long memories will recall that October 19 saw the biggest one-day drop in stock prices since 1929. Even so, stocks ended the year in the black.

S&P 500 Second-Worst Fourth Quarter Since 1945

The financial crisis was front and center in the final quarter of 2008. Stocks in the financial sector led the market down by declining 37.6%.

S&P 500 Third-Worst Fourth Quarter Since 1945

The 1973 oil shock began in October when OPEC raised the price of crude by 70%. Oil rose to a new peak price of $5.11 a barrel. 

S&P 500 Fourth-Worst Fourth Quarter Since 1945

Dot-com stocks peaked in March of 2000. By the fourth quarter, many other stocks also were headed lower. November was the weakest month of the year.

S&P 500 Fifth-Worst Fourth Quarter Since 1945

The Iranian Revolution was driving up oil prices while the Federal Reserve was trying to fight inflation by boosting the fed funds rate from 6.9% in April to 10% by the end of 1978. That was enough to send stocks lower.

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