Welcome to Thoughts on the market. I'm Andrew Sheets, Chief Cross Asset

Strategy for Morgan Stanley. Along with my colleagues bring you a variety of

perspectives, I'll be talking about trends across the global investment landscape and how we put those

different ideas together. It's Friday, November 15th at 2 p.m. in London.

London is always farther north than you think it is, and November can be a brutal reminder of that fact with a

sun that doesn't rise until after seven in the morning and will set today at about

4.15 in the afternoon. The darkness however has a silver lining.

Stock market returns tend to do better near the end of the year,

a phenomenon in every sense of the word that's been the case for well over 70 years.

For both U.S. and global equities, November and December have some of the highest average monthly returns and the lowest average monthly volatility of any months of the year.

If you're curious, February, June, and September tend to have some of the worst.

There are a variety of theories of why stock markets tend to do better at year-end,

from holiday cheer to investors starting to buy the stocks they want to own for the year ahead a little bit early.

It seems almost silly that in an era of an immense amount of data and computing power,

a major focus of investors and a driver of return is the position of the Earth relative to the Sun.

Yet for all the focus on seasonality and more likely to come over the next several weeks,

there are certain things to keep in mind.

First is that frequency and magnitude aren't the same thing.

Historically, the market is much more likely to go up in November and December,

but the average gain of these two months is about 3%.

That's a very good two month average return, however, other factors can easily overwhelm it.

Indeed, while markets have risen about 70% of the time in December, that means they've still fallen about 30% of the time. Some of these

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