Ask Matt: Will stocks 'pay for' the great November?

Q: Will stocks 'pay for' the great November they had?

A: Some investors might think the solid gains of November, sparked after the election, can't last. But history shows the gains weren't actually all that great, and they don't have any bearings on what happens in December anyway.

Seeing a 3.4% gain in the Standard & Poor's 500 is certainly a welcome increase for the market, which had been treading water as election rhetoric heated up. But the gains were below those of 24 other Novembers since World War II, says Sam Stovall, strategist at CFRA. For instance, the S&P 500 jumped 10.2% in November 1962 on relief the Cuban Missile Crisis ended. Now that's a solid gain and still the record for the best November gain.

Some investors might also think solid gains in November would take some of the gas out of the market and reduce future gains in December. That's not the case, either. Following the 24 best months of November since World War II, stocks gained 71% of the time in December by an average of 1.2%, Stovall says.

If there was a gain that was unusual this past November, it was the one in shares of small-company stocks. The S&P SmallCap 600 index jumped 12.4% in November, which topped the index' previous record gain of 8.8% in November 1982. Strong Novembers in small company stocks hasn't hurt gains in the same stocks in December, either. After gains in November ranking in the all-time 25% best, small-company shares rose an average 2.7% in December. December, historically, has been a bullish time for small company stocks anyway, as the S&P SmallCap 600 gained 76% of the time and posted average gains of 2.6%.

That's not to say that stocks could run into trouble in December. But don't blame November.

USA TODAY markets reporter Matt Krantz answers a different reader question twice a week. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.