As we write this the S&P 500 with dividends is down 0.4% for the year and more than three percent in December. A down December is unusual based on historical returns going back to 1930. Indeed, they averaged 1.7% since 1930, 1.7% since 1960 and 2.0% since 1990. There have been down Decembers four times since 1990, the worst being in 2002, when the S&P 500 declined 5.9%.

The chart below summarizes monthly seasonality going back to 1990. What does it tell us?

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