March Madness

Well, it had to end eventually. The S&P 500 Index is set to close lower on a total return basis for the first time in a record 15 months. “February finally cracked the volatility genie out of the bottle, and now the big question is: will he stay out for good? The good news is that March kicks off two of the strongest months historically for equities, before we hit a period of seasonal weakness from May through October,” according to Ryan Detrick, Senior Market Strategist.

Here are some stats to chew on for the S&P 500 as we enter March:

  • March was the only month to close in the red on a price basis last year (down 0.04%).
  • During a mid-election year, March has been down only once in eight instances since the mid-‘80s, and that was in 1994.
  • Over the past 10 and 20 years, March has ranked as the second best month on average, at 2.4% and 2.1%, respectively; since 1950 it has been up 1.2% on average, which ranks fourth.* Not to be outdone, April has historically been even stronger in two of the three periods, as the chart below shows.

  • Since 1950, when March has begun the month above its 200-day moving average, the average return has slightly improved to 1.3%.
  • Over the past 20 years, when March has finished in positive territory, the returns have been quite strong—with a return of 4.1% on average. Only October sports a better return when positive.

With several potentially market-moving events coming up in March, could 2018 be different from previous years? For more on the big events to be on the lookout for next month, and what they could mean for the markets, check out Market Madness for Central Banks.

 

IMPORTANT DISCLOSURES

*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.

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.

Past performance is no guarantee of future results.

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

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity 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.

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 200-day moving average (MA) is a popular technical indicator which investors use to analyze price trends. It is the security or index’s average closing price over the last 200 days.

This research material has been prepared by LPL Financial LLC.

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