History says the next 6 months could bring gains of 9% for stock market investors

• The S&P 500's 8.9% rally in November was its 18th strongest month since 1950, LPL Financial said.
• Seasonal tailwinds, falling bond yields, solid earnings, and expectations for Fed rate cuts helped fuel the rally.

The stock market's rip-roaring November was the strongest month of 2023, and it could signal more gains in the future.

Bullish seasonal tailwinds, declining bond yields, and expectations for the Federal Reserve to ease monetary policy all helped power the S&P 500 to 8.9% gains. The flagship index also broke a streak of three consecutive down months.

Those gains mark the S&P 500's 18th strongest month since 1950, according to LPL Financial, which cited historical data. November also ranks as the fourth best month in the last decade, just behind July 2022, and November and April 2020.

"November certainly lived up to its reputation as being the best month for stocks," Adam Turnquist, chief technical strategist for LPL Financial, wrote in a note Friday.

And that bodes well for the coming six months.

Based on the best 20 months for the S&P 500, he pointed out that the average forward returns over the next six months are 8.8%.

What's more, the average returns over the next year after a top-20 month stand at 13%.

"Looking at all periods back to 1950, there have now been 31 occasions where the S&P 500 has gained over 8% in a month," Turnquist wrote in a separate note published Thursday. "The average return a year later, from the end of the strong month, is almost 16%. This is significantly higher than the average for 12-month periods that followed months where stocks returned less than 8%."