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Q4 Stats, Seasonality, and Why Staying Put Still Wins
- Jose Alvarez, CFP®, MBA
- Oct 6
- 3 min read
Updated: Oct 7
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The Feel of the Fourth Quarter
Every fall the rhythm changes. The federal fiscal year resets on October 1, holiday plans start swallowing weekends, and companies button up budgets. Money moves with a little more purpose. If you have watched markets for a few seasons, you can feel it before you see it.
What The Tape Has Shown
Since 1928, the average quarter for the S&P 500 has landed a bit above 2%, while Q4 comes in closer to 3%. Zooming in on monthly data since 1950, September is the only month with a negative average, February, June, and August are typically sleepy, and November - with December close behind - does much of the year’s heavy lifting.
When We Enter Q4 Already Up
There is a quirk that surprises newer investors. If the index is up 10% or more by the September 30 close, the average Q4 since 1950 has been a bit above 5%. Without that head start, the long‑run Q4 sits nearer 3%. No signal light flashes green because of this, but the wind tends to shift in your favor.
Averages Hide Weather
History is lumpy. The best Q4 on record, 1954, added more than 11% but the worst, 1987, took more than -23%. Those outliers live inside every long‑term average so planning only for calm seas is not a plan, it's a surefire way to be surprised every time the market dips.
How I Use Seasonality (Without Trading the Calendar)
I treat it as posture, not prediction. If Q4 tends to help, I want clients positioned to benefit without needing to guess the week-to-week. That means staying invested, keeping contributions on schedule, and letting written rebalance rules do the boring work when allocations drift.
Taxes get the same attention - loss harvesting, charitable gifts from appreciated stock, and measured Roth conversions build quiet value that does not depend on a year‑end rally.
Liquidity matters too. Adequate cash and short‑term reserves keep life from forcing sales just because headlines spike.
Reality Check
Averages are not outcomes.
Calendar patterns can fail for long stretches. The odds of seeing a down market rise the longer you are invested because you live through more seasons; the odds of finishing ahead rise with time because compounding gets more swings at the ball.
Both statements can be true, and both inform a patient process.
Where This Leaves Us
Yes, Q4 often helps. The data supports a cautiously optimistic posture, especially if the year is already positive heading into October. But the driver is still discipline - your savings rate, your mix of assets, your willingness to rebalance when it feels inconvenient, and the choice to hold enough cash so markets do not dictate your life.
If you want to pressure‑test that mix before year‑end, I am here for that work.
Jose Alvarez, CFP®, MBA
Founding Advisor
Harvest Horizon Wealth Strategies
The information presented in this blog is the opinion of the author and does not reflect the views of any other person or entity unless specified. The author may hold positions in any securities discussed in this blog. The information provided is believed to be reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. Images included in this blog are created by artificial intelligence. Any resemblance to any existing persons, past or present, is purely coincidental. The information provided is for informational, entertainment, and educational purposes and should not be construed as advice. Advisory services are offered through Harvest Horizon Wealth Strategies LLC, an investment adviser registered with the state of Wisconsin.
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