Past performance is no guarantee of future returns. However, novel research from eToro suggests that now could be a great time for me to top up FTSE100 shares.

The Footsie is up 1% so far in December, which some believe could be the start of a Santa Claus rally. Markets are rising on hopes of imminent interest rate cuts from the Federal Reserve, along with tax cuts under the returning President Trump.

History shows that December rallies are not uncommon. According to eToro “Stock investors enjoy almost a quarter of their annual profits in December“. British investors in particular benefit most from the financial market turmoil at the end of the year.

FTSE is doing better

The eToro broker analyzed the behavior of 14 major global indices over the last 50 years. He showed that “December’s return averages 1.63%, well above the average monthly return of 0.57% from January to November“.

Encouragingly for UK investors, the FTSE 100 has left the mark of almost all other major indices over past festive periods too.

Since its inception in 1984, it has achieved an average return of 2.29% in December, outperforming the remaining months of the year by a significant 1.93%. On average, as much as 36% of Footsie’s annual profits were realized in the last month of the year.

December’s average return is better than the 1.28% it was S&P500 has delivered in recent decades. Only Hong Kong Hang Seng the index has delivered a better average return over the last month among the major global indices, at 3.09%.

Top product I’m considering

As I mentioned at the beginning, past performance is not a reliable guide to the future. And now concerns about U.S. trade tariffs, China’s struggling economy and war in Europe and the Middle East pose a threat to this year’s Santa Claus Rally.

However, despite the macroeconomic and geopolitical risks, I believe that investing in stocks is worth seriously considering, whether it occurs in December or any other month of the year.

This reflects the better long-term returns that investors achieve compared to simply keeping their money in cash. For example, someone who bought a fund tracking the FTSE 100 index in 2019 would enjoy a solid average annual return of 6.2%.

Buying certain undervalued stocks in December can provide an even better return. Feniks Group (LSE:PHNX) is one of the cheapest stocks I am considering for my own portfolio.

In 2025, annual profits are expected to raise by 22%. This means that the company has a forward price-to-earnings (P/E) ratio of 9.4 times.

Moreover, the FTSE company also has a Price to Earnings Growth Rate (PEG) of 0.4. A reading below one means the stock is undervalued.

Finally, Phoenix’s stock dividend yield is a market buster at 10.8%.

Despite the threat of massive competition, profits could rise here as falling interest rates stimulate consumer demand. Phoenix’s bottom line is also expected to improve as demographic changes drive pension sales, now and in the long term.

This is a stock I am considering purchasing for my own portfolio. I think we can expect some stern improvement in stock prices in December and beyond.