Welcome to April, the Best Month for Equities Over the Past 10 Years

March Recap

  • The S&P 500 gained 6.6% for the largest monthly gain since October 2015. This was the largest gain in the month of March since 2009.
  • The S&P 500 only dropped 1% once all month, the least amount of 1% drops since October 2015, which had zero.
  • Only three days the whole month moved at least 1% (up or down). This is on the heels of an average of 11 moves of 1% during the previous three months.
  • And 15 days during the month were positive, the most since October 2013. The record is 19 up days in June 1955.

 
First Quarter Recap

  • At its lows, the S&P 500 was down 10.5% for the quarter, yet it managed to finish the quarter positive. You have to go back to the fourth quarter of 1933 for the last time a quarter was down double-digits and came back to finish positive.
  • The quarter ended with 13 consecutive days without a 1% move, the longest streak in over a year. This is all the more incredible when you consider that 26 of the first 48 days of the year saw at least a 1% move.
  • Recent first quarter returns were 1.3% in 2014, 0.4% in 2015, and 0.8% this year.

Largest Comebacks Ever During the Quarter

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Source: LPL Research, FactSet 3/31/16

 
April Preview  

  • April is the strongest month, on average, over the past 10 years, up 2.7% on average. In fact, March is the second strongest month over the past 10 years at 2.2%—seasonality is off to a good start so far.
  • Incredibly, April has been positive for 9 of the past 10 years, with the only blemish a slight 0.8% drop in 2012.
  • The last 10 times a month gained at least 6% (going back to 2002), the following month was higher 8 times with an average return of 3.0%.
  • Since World War II, if January and February are both lower, with March higher, then April has been positive 8 out of 10 times with an average gain of 3.4%.

April Is the Strongest Month Over the Past 10 Years
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Source: LPL Research, FactSet 03/31/16

 
Big Picture View

  • The S&P 500 has gained a total of 0.84 points the past five quarters. Over that same time frame, it moved a total of 4,735.26 points. That’s a lot of volatility without much to show for it.

A Whole Lot of Volatility, Yet Not Much to Show for It

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Source: LPL Research, FactSet 03/31/16

 
IMPORTANT DISCLOSURES
Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.

Stock investing involves risk including loss of principal.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

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