This time of year is often called the season of goodwill and it seems the sentiment extends to stock markets too. Evidence shows that markets consistently post some of their highest returns in December.
"The Santa rally is one of the more statistically robust trends," says Adrian Lowcock, investment director at Architas. "In December the stock market tends to rise gently in the first couple of weeks of the month before the Santa rally takes hold and then it rises strongly in the last two weeks of the year, which are statistically the strongest two-week period of the whole year."
Asset manager Schroders, which analysed 30 years' worth of data, found that the FTSE 100 index has been more likely to rise in December than any other month. Since 1987 the FTSE 100 has risen 83.3 per cent of the time in December. It has not just been the frequency of rises, but also the size of the gains. During that time the FTSE 100 has risen by an average of 2.4 per cent in December, the highest average gain of any month.