Although equities have seen a bit of a pullback during March, looking at the big picture, things continue to look constructive for potentially longer-term gains. It hasn’t been easy though, as last month the Dow had its longest winning streak (12 days) since 1987, only to follow it up this month with its longest losing streak (eight days) since 2011. Here’s the good news: stocks historically have done very well in April.
Per Ryan Detrick, Senior Market Strategist, “Whether it’s because of tax returns being used to buy equities, last-minute retirement fund contributions, or simply happier moods as the days get warmer, April tends to be one of the strongest months historically. In fact, over the past 20 years no other month has had a higher average return for the S&P 500 Index. It has also incredibly been higher 10 of the past 11 years.”
Here are some more April insights for the S&P 500:
- Since 1928, July has been the top-performing month. That might be surprising to most, as we don’t usually think about July as one of the strongest months. But April isn’t anything to ignore, as it is the third-strongest month. Also, it has been higher 62.9% of the time, with only December higher more often.
- Since 1950*, April has been the third-best month (1.5% gain on average) with November and December up more on average.
- Recently things have been much better. Over the past 20 years, April has been up 2.0% on average, which is the best month of the year.
- Over the past 10 years, April has been in the green nine times, with March, May, and December tied for second at seven. The only time April was in the red was in 2012, when it fell only 0.7%.
*Please note: The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.
Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.
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.
The economic forecasts set forth in the presentation may not develop as predicted.
Risks inherent to investments in stocks include the fluctuation of dividend, loss of principal, and potential liquidity of the investment in a falling market.
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.
The Dow Jones Industrial Average (DJIA) Index is comprised of U.S.-listed stocks of companies that produce other (nontransportation and nonutility) goods and services. The Dow Jones Industrial Averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore, their component weightings are affected only by changes in the stocks’ prices.
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