After the close on Monday, November 3rd, seasonal FSM models had their quarterly evaluations with trades coming out Tuesday morning. As a quick refresher, FSM seasonal models are evaluated at the beginning of February, May, August, and November with each evaluation taking place 91 days after the previous evaluation date (except for February which is the starting point of each annual cycle). To make sure the evaluations are not missed be sure to set an alert on the model(s) utilized by selecting the “Bell Icon” on the Models page. Users will receive an email any time there is a trade or a rebalance for that model(s). Below are notable changes to select seasonal FSM models.

FSM CoreSolution All Cap World 2S PR4050 Model (FSMCORESOL2-ACW-2S-PR4050) – This quarter, the FSM CoreSolution All Cap World Model sold the iShares MSCI USA Momentum Factor ETF (MTUM) and bought the Invesco QQQ Trust (QQQ), the highest scoring fund within the model universe. While the iShares MSCI Emerging Markets ETF (EEM) currently scores second within the model universe, FSM models utilize a score threshold for new holdings in which the new potential holding must outscore the current holding it is replacing by at least a tenth (1/10^th) of a point in fund score. The rule is in place to not cause potential whipsaw trades as well as in an effort to not end a long-term trend that continues. Current model holding, the iShares Morningstar Growth ETF (ILCG), maintains a fund score of 5.59 as of Monday’s (11/3) evaluation and resides within a tenth of a point of EEM (5.63), allowing ICLG to maintain as a current holding. With the change, the model will rebalance QQQ and ICLG to equally weighted at 50%. Note that the changes and explanation also apply to the FSM CoreSolution All Cap World 2M PR4050 Model (FSMCORESOL5-ACW-2M-PR4050).

FSM T Rowe Price 5S PR4050 Model (FSMWFTROWEPRICE5SPR4050) – This quarter the T Rowe Price Model saw a shift away from U.S. equities and into international. The three funds being removed are the T Rowe Price International Value Equity Fund (TRIGX), Equity Index 500 (PREIX), and Financial Services (PRISX) funds, and their replacements are the T Rowe Price Science & Tech (PRSCX), New Asia (PRASX), and Global Stock (PRGSX) funds. The model also utilizes a score threshold for new holdings in which the new potential holding must outscore the current holding it is replacing by at least a tenth (1/10^th) of a point in fund score. While the T Rowe Price Growth Stock Fund (PRGFX) currently ranks fifth as of the quarterly evaluation at 5.66, the fund scores less than a tenth of a point from the current holding, the T Rowe Price Blue Chip Growth Fund (TRBCX) (5.65), warranting TRBCX's continued inclusion in the model along with the T Rowe Price Global Technology Fund (PRGTX). Note that the changes and explanation also apply to the FSM T Rowe Price 5S MMPR50 Model (FSMWFTROWEPRICE5SMM50), and both models are now overweight international equities.

FSM American Funds 5S Model (FSMAMERFUNDS5S) – This quarter, the FSM American Funds 5S Model sold the American Funds Washington Mutual Fund (AWSHX) and bought the American Funds EuroPacific Growth Fund (AEPGX), the highest scoring fund within the model universe now already owned. The change increases the model’s exposure to international equities and still overweight U.S. equities with the other holdings being the American Funds New Economy Fund (ANEFX), Fundamental Investor (ANCFX), Investment Co. of America (AIVSX), and Growth Fund of America (AGTHX). With the change, the model will rebalance the five holdings to equally weighted at 20%. Note that the changes and explanation also apply to the FSM American Funds 5S PR4050 (FSMAMERFUNDS5SPR4050), FSM American Funds 5S MMPR70 (FSMAMERFUNDS5SMM70), and FSM American Funds 5S MMPR50 (FSMAMERFUNDS5SMM50) models.

With the start of November, we have also officially moved into the “seasonally strong” half of the year, which lasts from November through April. We are all familiar with the saying "sell in May and go away," which proposes that portfolio growth would do about as well if all holdings were sold as they would be if invested in the market from May through October. Typically, conjecture doesn’t mature into an adage without basis and market seasonality is just such an example as it has shown an impressive trend in terms of magnitude, consistency, and longevity. We’ve discussed seasonality many times over the years and as we switch between seasonally biased periods, we wanted to revisit the subject today.

The end of trading on Friday, October 31 brought the end of the seasonally weak period, which began with the close of the market on Wednesday, April 30, 2025. Over this period, the Dow Jones Industrial Average (.DJIA) returned 16.95%, the best “seasonally weak” period since 2009.

Years ago, we began using the Stock Trader's Almanac, a reference tool published by Yale Hirsch that has been a fantastic source of information on the stock market ever since. In fact, we always order several copies for the office each year (if you would like a copy, you can visit www.stocktradersalmanac.com). The premise of the "Market Seasonality" study is that historically speaking, the market performs far better during the November to May period than it does from May to November. On its own, that isn't a particularly profound statement, however, when we examine the magnitude of this effect over the years, its significance becomes clear. Consider this: if you had invested $10,000 in the Dow Jones on April 30 and sold it on October 31 each year since 1950, your cumulative return would be only about $15,919. Meanwhile, the same $10,000, invested only during the seasonally strong six months of the year, would now be worth a little over $1.3 million. Put another way, almost all the growth of the Dow since 1950 has effectively occurred during the "good" six months of the year.

In the graph below, we have reproduced the US Market Seasonality strategy that was first published in the Stock Trader's Almanac beginning in 1950 based upon the Dow Jones Industrial Average. The pink line reflects the seasonally weak period, while the blue line shows the seasonally strong six months. You will note that a theoretical $10,000 initial investment in 1950 is barely on the positive side when invested only from May through November. On the other hand, an identical $10,000 initial investment grew to $1.3 million with an average annualized return of 6.73% if invested only from November through May each year.

Market Seasonality Notes

• Since April 28, 2000, the Dow has gained more than 275%. However, the Dow is up only about 42% if we isolate only the seasonally weak periods over the same timeframe.
• During the seasonally weak May to November periods, 29 out of the 76 years examined finished down, while there were only 17 years during which the seasonally strong period produced a negative return.
• The best strong seasonal period came in 1986 as the Dow gained over 29%, while the worst seasonally strong period came in 1970 at a 14% loss.
• The best seasonally weak period came in 1958 at a 19% gain. Only eight of the past 74 weak periods have seen double-digit gains. With the most recent occurrence this year when the Dow gained 16.95% from May through October.
• The worst seasonally weak stretch came in 2008 when the Dow lost over 27%. There have been eleven seasonally weak periods to lose more than 10%, with 2008 being the last occurrence.
• 2022’s loss during the seasonally weak period ended a six-year streak of positive returns from May through October, tied for the longest streak of positive “weak” periods in our study timeframe (also 1950 – 1956).
• Only seven weak periods have seen back-to-back negative returns, which last occurred from 2022 - 2023. The longest stretch of consecutive losing weak periods was three years from 1977 – 1979.

We acknowledge that this study is not a sophisticated tool for risk management, but it is interesting and does expose biases within the market. As mentioned above, we are coming off a seasonally “weak” period which failed to live up to its name as the Dow gained nearly 17%. Part of this has to do with the proximity of the “Tariff Tantrum” bottom in mid-April this year, but it goes to show seasonality is not a foolproof strategy. As we enter the seasonally strong period, US equities are much higher than they were six months ago. There is some froth in the market as we enter the seasonally strong period, however, domestic equities remain at the top of our asset class rankings which highlights the solid intermediate/long-term picture for domestic equities.

Daily Option Ideas for November 4, 2025