A Closer Look at December in Post-Election Years

Key Points:

• December has historically been one of the best-performing months for stocks
• December of Post-Election years has seen particularly favorable stock market action
• Below, we examine Dow Jones Industrial performance during December of Post-Election years since 1901

Establishing the baseline

In this piece, we will take a close look at stock market performance during December of Post-Election years in the United States. Let's first establish a baseline of comparison by looking at the performance for "all months" starting in 1901. For testing, we will use the monthly closing price of the Dow Jones Industrial Average from January 1901 through October 2025. The table below displays a monthly performance summary for all 1,498 months included in the test period.

Now, let's see if there is any appreciable difference in market performance during December of Post-Election years versus the "average" month performance highlighted above.

Dow performance during December of Post-Election Years

For our test, we are using month-end price data for the Dow Jones Industrial Average, as we have data available dating back to 1900. We will examine Dow performance from December 1901, 1905, 1909, and every subsequent fourth year through 2021. December of 2025 is the next year in this sequence.

 The chart below displays the growth of $1 invested in the Dow only during December of each post-election year starting in 1901.

The chart below displays the performance of December of each post-election year since 1901.

The table below displays a summary of monthly performance for all 30 post-election Decembers since 1901 compared to the baseline results for all months starting in 1901.

Things to note regarding December of post-election years versus all months since 1901:

• A higher Win Rate (74.2% versus 58.3%)
• Average and Median monthly returns are over two times greater than the average of All Months
• A lower standard deviation and significantly higher risk-adjusted returns (Ave./Std. Dev.)
• A "worst" monthly loss of just -3.2%

What the research tells us…

December of the post-election year has a solid history. That said, a 74% Win Rate - while well above average - is by no means a "sure thing." Essentially, once every sixteen years  (i.e., one out of every four post-election years), December will show a loss during a post-election year. The good news is that the worst previous loss during a post-election December was a manageable -3.2%. The bad news is that there is no reason this amount couldn't be exceeded in the future. All in all, the historical results suggest that investors and traders give the bullish case for stocks the benefit of the doubt during December 2025.