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With Q3 coming to a close, 2013 has been nothing but great for the bulls, but as we head into Q4, what does history tell us to expect for the remainder of the year? Friday afternoon we looked at the performance of sectors during the fourth quarter, and the table below lists the results going back to 1980. Below that we have also included a chart showing how often each sector has been up in Q4.

As shown in the chart, Q4 has historically been strong for equities as the S&P 500 (4.26%) and all ten sectors have averaged positive returns. Consumer Staples has seen the best returns during the quarter, averaging a gain of 5.33%. Technology (5.01%) is the only other sector that has averaged a gain of more than 5% during the quarter, although Health Care is not far behind at 4.97%. On the downside, even sectors like Energy (2.43%) and Utilities (3.04%) that have lagged the market have seen decent returns in Q4.

In terms of consistency, Consumer Staples and Health Care have been the most consistent on the positive side with gains 84.8% of the time. Since 1980, the only years where the Consumer Staples sector has declined in Q4 were 1980, 1987, 2005, 2008, and 2012. For Health Care, 1983, 1987, 2007, 2008, and 2012 are the only years where the sector declined in Q4 going back to 1980. Obviously, anything can happen this year, but from a seasonal perspective, history is on the side of the bulls.

(click to enlarge)

Source: Q4 Seasonality: The Most Wonderful Time Of The Year