Happy holiday tradition

401(k) investors could profit from post-Thanksgiving rally

401(k) investors, already thankful for the sizable stock market gains in 2017, may also benefit from a post-Turkey Day rally on Wall Street.

Thanksgiving is a holiday that usually shines a lasting glow on investors saving for retirement and other goals.

The stock market has a habit of going up after Thanksgiving and finishing the year strongly. Since 1945, the Standard & Poor’s 500 stock index has risen nearly 2 percent from Thanksgiving to the end of the year. That return has increased to 2.14 percent since the 2009 bull market began.

“Statistically and historically, this is the best time to invest,” Louis Navellier, a money manager at Navellier Associates, noted. “The holidays are a happy time of year and that positive sentiment typically launches a healthy year-end rally in the stock market.”

It’s already been a bullish year for stock investors. The large-company S&P 500 index is up 16 percent, driven higher by strong corporate earnings, a slow pace of interest-rate increases and anticipation of a tax cut plan that is seen boosting economic growth and corporate profitability.

Early projections are for more gains in 2018, according to two Wall Street strategists that have unveiled their predictions for the New Year. That outlook comes despite a market that is trading at above-average prices relative to corporate earnings, and which hasn’t suffered a fall of more than 5 percent since June 2016.

Brian Belski, chief investment strategist at BMO Capital Markets, sees the S&P 500 finishing next year at 2950, or more than 13 percent above its current level. Belski expects 2018 to look a lot like this year, with stocks being pushed higher by an expanding economy, continued strength in corporate profits, a cautious Federal Reserve, as well as the possible benefits of a corporate tax cut.