December is the best month for shares. Since 1984 (when the FTSE 100 was created), the index has increased on average by 2.3% in December. In fact, in the 28 years since 1984 the market has only fallen five times in December – a quite remarkable record. It hasn’t always been like this, as for many years April was the strongest month, but for the moment December is top dog.
And this stellar share strength in December is seen across the world: the average monthly returns across 70 world equity markets are highest in December.
As can be seen in the accompanying chart, the market tends to increase gently in the first two weeks of the month, but then goes into overdrive and rises strongly in the final ...