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Black Friday 2025: 92% of Years Deliver Positive S&P 500 Returns
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Published in Stocks and Investing on Monday, December 1st 2025 at 20:57 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Black Friday Investing Lessons – A 2025 Take‑away
The holiday season has long been a time of joy, family and—if you’re a shareholder—an unexpected chance to earn a little extra. The Motley Fool’s “Black Friday Investing Lessons” article (published on December 1, 2025) pulls back the curtain on why the day after Thanksgiving is worth paying attention to, what investors can learn from the past, and how to use the window to fine‑tune a portfolio before the year closes. Below is a comprehensive summary of the key insights, contextual links, and actionable take‑aways that the piece offers.
1. The Myth and the Data: What is “Black Friday” in the Market?
Historical Performance
The article opens with the statistic that Black Friday (the Friday following Thanksgiving) has produced positive returns for the S&P 500 for 12 of the last 13 years—a 92% success rate. In 2025, the index closed up 0.8%, a modest gain but part of a broader upward trajectory for the year.Why It Happens
A few reasons are cited:
Retail Optimism – After a heavy holiday shopping period, consumers feel financially buoyant.
Earnings Beat – Many companies report better-than‑expected results in the third quarter, nudging sentiment higher.
* Fed Signals – The Reserve has often hinted that rate cuts could be on the horizon in the final quarter.
The article emphasizes that this isn’t a guaranteed “buy” signal. Rather, it’s a data point that, when combined with other fundamentals, can inform an investment strategy.
2. Timing the Market: Practical Steps for Retail Investors
The Fool’s article gives three core steps to “time” Black Friday while still staying within the bounds of sound long‑term investing.
| Step | What to Do | Why It Matters |
|---|---|---|
| Re‑evaluate Position Size | Look at how much capital you’ve allocated to high‑beta growth stocks. Consider trimming a little if the sector appears over‑extended. | Black Friday is often a re‑balancing moment—the market can correct for a rapid climb earlier in the year. |
| Review Dividend Capture | Some investors sell shares of high‑dividend companies just before ex‑dividend dates to pocket the cash. If you’re doing this, schedule the sale before Black Friday, then repurchase after the market reacts. | Capturing dividend income can provide a tax‑advantaged yield boost, but the timing has to be right to avoid missing out on the post‑dividend rally. |
| Tax‑Loss Harvesting | The article stresses that Black Friday is not the end of the year. However, the window before the holiday gives a chance to harvest losses on underperforming holdings before they rebound in the New Year. | Losses reduce capital gains tax, improving after‑tax returns. |
These tactics are linked in the article to the Fool’s “Year‑End Tax Strategy” guide, which offers deeper coverage on harvesting and its timing.
3. Risk Management: Stay Calm, Don’t Panic
Avoid “Buy the Dip” Hysteria
The piece warns that many retail traders “jump in” during the holiday lull, chasing the low. Historically, the market has often been more volatile around holidays (particularly in 2023 when a pandemic‑related scare caused a sudden dip). The authors urge sticking to a long‑term plan.Use Stop‑Loss Orders Wisely
While a stop order can protect against a sudden plunge, placing it too tight may result in a “stop‑loss whipsaw.” The article recommends setting stops at a 5‑10% buffer for large positions, then monitoring them closely on Black Friday when intraday volatility spikes.Diversification Over Concentration
The article points out that a diversified portfolio—mixing large‑cap growth, mid‑cap, small‑cap, and fixed‑income—tends to perform better during the holiday period. Even if the S&P climbs, sector rotations can cause outlying performances.
4. Sector‑Specific Take‑aways
The Fool’s piece includes a section on which sectors often lead the Black Friday rally:
| Sector | 2025 Trend | Why It’s a Good Bet? |
|---|---|---|
| Technology | 5% gain in the third quarter | Strong earnings & demand for cloud services |
| Consumer Discretionary | 3% gain | Holiday sales boost |
| Healthcare | Flat | Regulatory uncertainty |
| Financials | 1% gain | Fed’s dovish stance |
The link to the “Sector Outlook” page on the Fool’s website offers deeper metrics such as PEG ratios, price‑to‑earnings comparisons, and analyst consensus. Investors are encouraged to read that analysis before deciding whether to tilt more heavily into any of these segments.
5. Psychological Preparation: Mindset Matters
The article spends time on the mental game. It reminds readers that Black Friday is a single day—most portfolio changes should happen in the broader context of an annual strategy. The Fool stresses:
- Patience – Reinvesting dividends and staying invested through volatility pays off over time.
- Consistency – Automated monthly contributions (or “robo‑advisor” rebalancing) help avoid the temptation to time every holiday swing.
- Emotional Discipline – The “black‑friday hype” can be a breeding ground for FOMO (fear‑of‑missing out). Keeping a written plan can curb impulsive decisions.
The article cites a small study from the University of Chicago that links “habitual trading” around holiday periods to underperformance. The study is referenced in a footnote, encouraging readers to check the original research for a deeper dive.
6. Key Take‑aways for the Year‑End
- Black Friday is usually a mild bump, not a crash‑or‑boom day.
- Use the holiday window for small re‑balancing and tax‑loss harvesting.
- Stay diversified and avoid the temptation to chase short‑term gains.
- Set realistic stop‑losses to protect against sudden volatility.
- Maintain a disciplined mindset—avoid letting holiday hype derail your long‑term plan.
The article concludes with a quick “Next Steps” checklist:
- Run a quick portfolio snapshot in the next 48 hours.
- Identify any sectors over‑ or under‑weighted compared to your target allocation.
- If needed, sell or buy to correct.
- Harvest any realized losses before the end of the year.
- Re‑invest dividends and set your holiday rebalancing order.
7. Additional Resources
The Fool article links to several external guides that can provide deeper context:
- Year‑End Tax Strategy – details on loss harvesting and capital gains planning.
- Sector Outlook – weekly snapshots of sector valuations and growth forecasts.
- Holiday Season Trading Strategy – an in‑depth look at how seasonal sentiment impacts different asset classes.
The author also references a podcast episode featuring a panel of portfolio managers who discuss the 2025 holiday market outlook, which is available on the Fool’s audio platform.
Bottom Line
Black Friday may have earned its name from consumer shopping, but for investors it offers a predictable, albeit modest, bump in equity returns. The Motley Fool article encourages readers not to treat the day as a market event to be ridden, but as a window—one of many—to fine‑tune a well‑diversified, tax‑efficient portfolio in line with long‑term goals. By sticking to disciplined rebalancing, keeping an eye on sector trends, and maintaining psychological discipline, investors can use the holiday season to their advantage without falling prey to the typical “holiday hype” that can derail a thoughtful investment strategy.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/12/01/black-friday-investing-lessons/ ]
