by Gary Alexander

September 28, 2021

Thursday marks the end of the third quarter and the dismal market month of September. Friday marks the beginning of the historically powerful fourth quarter. Like football and most sports, you can pretty much ignore the first three quarters. The fourth quarter is when the drama happens, when money is on the line.

As I reported last year in this space, “In the last 20 years, according to Bespoke Investment Group (BIG), the Dow Jones Industrials gained 4.5% in the fourth quarter vs. a cumulative 1.2% gain in the first three quarters combined.” That trend continued nicely in a turbulent 2020, with the Dow down 2.65% in the first nine months of 2020, then up 10.2% in the final quarter of 2020. Here’s a chart for the last 20 years.

Standard and Poor's 500 Index Seasonality Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Going back further, to 1950, the first nine months of the year averaged +4.64% for the S&P 500, while the closing three months averaged almost as much, +3.95%, according to the Stock Trader’s Almanac.

The fourth quarter – like the conclusion of sporting events or Broadway plays – is where the drama lies. Similarly, the third quarter is where the doldrums often occur, making the fourth quarter’s performance all the more refreshing. Why is this true? Let me quote Louis Navellier, writing elsewhere in this issue:

“Essentially, what happens in the fall is that consumers cheer up as the holidays approach. When we gather with family and friends during Thanksgiving and other holidays, consumer sentiment naturally rises. When consumer sentiment rises, investor sentiment also improves, which is why year-end rallies are common. Additionally, there is a lot of year-end pension funding, which typically starts by Thanksgiving.” –Louis Navellier, writing in this week’s MarketMail

In addition, third-quarter earnings will be reported from mid-October to late November, and this quarter’s reports are usually special, since companies start announcing guidance for the coming year. Also, some investors start filling out their pension plans early, including gift purchases for others around Christmas.

This year, there may be an even more festive spirit around the Thanksgiving and Christmas season, especially now that we see big crowds returning to football stadiums, and we can visit families again.

This year has something else going for it – the closing digit, the odd-numbered “1” in 2021.  I’ll explain that in a minute, but first, here are all the numbers for the S&P 500 fourth quarters in the last 20 years:

Standard and Poor's 500 Performance Table

The stellar fourth-quarter performance of the stock market over the last 20 years is all the more amazing since it includes controversial election years like 2000 (Gore vs. Bush), 2008 (Obama vs. McCain during the financial crisis and deep market crash), and 2016 (Clinton vs. Trump), the controversial 2020 election just past, as well as the 24% market drop in the fourth quarter of 2018. That’s a lot of bad fourth quarters.

Look at those numbers and tell me one thing they all had in common… (Hint: Were they even or odd?)

Fourth Quarters in Election Years Were Weak (+0.6%)
But Odd-Numbered Fourth Quarters Rose About 7%

Here’s where the numbers begin to taste better. In years divided by four, we hold Presidential elections. Most of the last six such elections have been highly controversial, causing a disturbed stock market in their wake. In the other even-numbered years, we hold Congressional elections, where every House seat is up for grabs as well as one third of Senate seats, often resulting in a repudiation of the President’s Party.

As a result, the even-numbered fourth quarters since 2000 have averaged tiny (0.6%) gains, while the odd-numbered fourth quarters averaged gains of nearly 7%. The last time I checked 2021 is…odd.

Recall, if you will these capsule election-year results or crises in recent even-numbered fourth quarters:

  • 2000: Bush vs. Gore went down to “hanging chads” in Florida and a Supreme Court vote (while the S&P 500 careened down 8.1% in the fourth quarter).
  • 2002: The economy remained mired in the dot-com recession while the nation debated President Bush’s plans to invade Iraq (while the S&P rallied +7.9% off its September lows).
  • 2004: The Bush vote in Ohio was challenged in the House, but the S&P 500 gained 8.7%.
  • 2006: The Democrats took control of Congress, and the S&P 500 gained 6.2%.
  • 2008: A major financial crisis struck, and Barack Obama was elected (the S&P fell 22.6%).
  • 2010: The Tea Party revolution put Republicans in control of Congress; the S&P gained 10.2%.
  • 2012: Barack Obama defeated Mitt Romney, but the S&P declined 1% that quarter.
  • 2014: The Republicans won control of the Senate and retained the House (the S&P gained 4.4%).
  • 2016: Donald Trump surprisingly beat Hillary Clinton, and the S&P 500 gained 3.25%.
  • 2018: The Democrats took back Congress as the Fed tightened, sending the S&P down 14%.
  • 2020: Joe Biden beat Donald Trump and hopes of a Covid recovery lifted stocks 11.7%.

In those 11 election years, the fourth quarter rose seven times and fell four times for a net average gain of just 0.6%. In contrast, the fourth quarter S&P performance in the last 10 years ending in odd numbers – non-election years – averaged +6.75% with only one small drop, making odd-numbered years about 11 times better than election years in this century. That makes me feel better about entering this final quarter.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.


Marketmail Survey #6 is now closed.

About The Author

Gary Alexander

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

Important Disclosures:

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.