With the S&P 500 only modestly higher on the year and having traded lower in January, historically one of the best months for stocks, it would appear that U.S. equities are not obeying the seasonal trends offered by the best six-month period. That being November through the end of April.
Investors will be heartened to learn that March and April are strong months for U.S. equities. Over the last 20 years, March and April on average have delivered returns of 1.52% and 2.19%, respectively, topping all other months, reports Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.
That jibes with the outlook offered by Brooke Thackray, one of the foremost experts on seasonal investing.
“The next two months of March and April are on average two of the stronger months of the year. With this favorable seasonal trend just around the corner, it does not make sense to become overly bearish on the market. It is more prudent to be cautiously looking for opportunities,” said Thackray in a recent note.
Over the past 20 years, the S&P 500 has a March win rate of 70% and an April gain frequency of 75%, according to Equity Clock.
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The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
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