Investment Strategist
You can almost picture the scene. It is early November, markets look tired, headlines talk about corrections and bubbles, and many investors decide to “wait for a proper dip”.
Then volatility hits, indexes lurch lower for a few days, healthcare and other defensives perk up, and artificial intelligence favourites wobble. Before most people have finished debating what to do, prices rebound. By late November, a familiar feeling returns: “I waited, markets bounced, and I missed it again.”
This is where seasonality can help, not as a trading signal, but as a way to reframe the whole problem. Markets really do have “seasons” around year end, yet those patterns are far too small and noisy to pick the perfect day. Used properly, they are a reminder to think in years, not weeks, and to spread entries across a broader market that is no longer just Nvidia plus friends.
Let us start with what the calendar actually tells us. Historically, the final stretch of the year has been a slightly kinder period for equities. The so called “Santa Claus rally” describes a tendency for stocks to rise in the last five trading days of December and the first two of January, with the S&P 500 averaging around a 1.3% gain in that seven-day window and posting positive returns in roughly three out of four years.
Zoom out, and November and December have often ranked among the stronger months for US stocks, but only by a few percentage points and with plenty of exceptions. Some years deliver strong rallies, others drift sideways, and there are still painful end of year selloffs. Seasonality is more like a gentle tailwind than a guarantee.
The more important statistic is how time works with you as the horizon stretches. Over nearly a century of data, the S&P 500 has been positive in only about 59% of individual months, which barely beats a coin toss. Yet every 20-year holding period has delivered a positive total return. In other words, the odds tilt in your favour because of time in the market, not because November is slightly better than June.
So if you feel you “missed” the brief weakness earlier this month, seasonality offers two practical lessons. First, short term wobbles are normal and often resolve quickly, which is exactly what made timing so hard in the first place. Second, there will be many more Novembers and Decembers. The key is to build a plan for all of them, instead of treating this one as a once in a lifetime entry point.
For most of the artificial intelligence story, Nvidia has felt like the main character. Since the launch of ChatGPT in November 2022, its shares have climbed roughly tenfold, turning the company into a symbol of the entire AI build out. That is also why recent wobbles have captured so much attention.
In the past few weeks, concerns about competition from Alphabet’s tensor processing units and potential chip deals with big cloud customers have weighed on Nvidia. At the same time, Alphabet and Broadcom have been stronger, helped by excitement around new AI models and infrastructure demand. The message from the tape is not “AI is over”. It is that leadership within the theme is rotating, and the market is learning to reward other parts of the stack, such as cloud platforms and networking.
Beyond AI, healthcare has quietly stolen the show. Recent data suggest the S&P 500 Health Care Index has gained around mid-single digits in November, while the wider market has slipped and technology has been the weakest sector. Fund managers have increased their healthcare allocations, attracted by steady earnings, obesity drug growth and the defensive appeal of the sector after a long period in tech’s shadow.
For investors sitting on cash, this is actually good news. A market that rewards more than one story is easier to enter. Instead of feeling forced to buy the latest AI favourite at any price, you can build a mix of broad indices, healthcare exposure and selected themes that reflect different parts of the economy. The rotation into healthcare, and the broader leadership beyond Nvidia, effectively doubles as a second chance for those who missed the first AI wave.None of this means the path from here is smooth. Seasonality can fail outright in the face of a major shock, whether from geopolitics, central banks or a sudden earnings downturn. A year end that “should” be positive can still deliver a sharp correction, as 2018 and other episodes have shown.
There is also a risk that investors overread the latest sector rotation. Healthcare’s outperformance in November partly reflects worries about an AI bubble and stretched tech valuations. If those fears ease, leadership could swing back quickly, leaving anyone who piled into “what has just worked” feeling whipsawed yet again.
Finally, a broader market is not a cheaper market. Parts of healthcare and AI infrastructure already trade on rich expectations. Even if these sectors remain stronger than average, returns from today’s prices could be bumpier than recent headlines suggest.
The temptation after a fast rebound is to focus on the missed moment. You remember the afternoon you nearly clicked “buy” and the headline that scared you away. From that angle, November’s brief wobble feels like one more chapter in a long story of bad timing.
Seasonality offers a kinder lens. Historically, late year markets are slightly more favourable, but only by enough to reward those who are already participating, not those waiting for a postcard perfect entry. At the same time, the recent rotation away from a single hero stock toward healthcare and other sectors shows that the opportunity set is wider than it looked a few months ago.
For long-term investors, the useful response is not to chase the latest winner, nor to obsess over the low that got away. It is to accept that there will always be another November, another wobble and another surprise leader, and to build a plan that can live through all of them without needing to guess which week to move.
This material is marketing content and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
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