My #1 Reason to be Bullish Now!

“April prepares her green traffic light, and the world thinks, ‘Go!’” – Christopher Morley

On the farm, the daffodils are in full bloom.

Spring is officially here!

It’s the season of new beginnings.

And for First Bar, we have some new beginnings we’re happy to share…

First, I’m excited to announce that starting next week I will be joining Money Map Press as their Trends Investing Strategist.

We will be launching several products together, including a monthly newsletter and a trading service. I’ll keep you up to date as we get closer to these debuts.

I will also begin hosting a show on Money Morning LIVE every Tuesday at 11:00 AM ET. I will spend half an hour delving into the trends that I’m watching in the markets, as well as some other exciting analysis!

Over the last several weeks I’ve enjoyed being a frequent guest on several of their broadcasts. And you can keep up to date on any future appearances by following me on Twitter @matthewscarr

And finally, on April 12, I will be presenting at the Money Show’s virtual expo on Money, Markets & Monetary Policy. I’ll be discussing the moves I believe investors should be making in 2023.

So, spring is here… new beginnings are blossoming.

Now, let’s get down to the reason I believe investors should be bullish right now!

We’re going to dig into one of my favorite months of the year – April.

The month is home to April Fool’s Day, Tax Day, Earth Day, and my personal favorite holiday, Greek Easter.

But none of those are why I’m bullish this month… even though lamb on a spit is a cure-all for almost anything (unless you’re the lamb).

The reason I’m bullish has to do with one of the strongest long-term trends in the markets.

The Market’s Awesome April

Awesome April.

That’s what I call it, and you should too.

Of course, we all know the weather is warmer this time of year, flowers are in bloom, and spring is in full swing as March’s notorious “Second Winter” fades.

But for investors, April provides even more reason to cheer… And that’s because it’s routinely the best month of the year for stocks.

Looking back over the last three decades of monthly returns, the Dow Jones Industrial Average is averaging a 2.46% gain in April.

This is the type of towering bar every investor wants to see.

And there’s only one other month even remotely as strong as April: November.

April is also the last month of true strength before we nestle ourselves into the annual “Summer Lull” from June through September.

But April’s reputation for solid gains is only one piece of the pie here.

The reason April is a truly a awesome month for stocks is that it’s so reliable, unlike Flaky February, Maddening March, Jittery June, or Sloppy September.

The markets tend to see April’s green light and shout “Go!” year after year after year...  

Nothing Rains on this Parade of Gains

Successful investing is built on probabilities.

If we know the most likely outcome - if we know the trend is with us or against us - we can position ourselves appropriately. And the better chance we have of reaping the rewards of a winning trade.

Well, for the Dow, no other month has a higher probability of success than April.

It often doesn’t seem to matter what’s happening at the macro level – a global pandemic, a recession, a crisis in Europe, or a financial collapse - U.S. blue chips tend to push higher in the month.

In fact, since 1993, the Dow has only finished April lower seven times.

That’s an outstanding 76.67% success rate.

And we saw 16 consecutive years of gains in the month from 2006 to 2021!

There is no other period on the calendar that is remotely that resilient for the Dow.

*** Now, over on the Nasdaq 100, the Invesco QQQ ETF (QQQ) has seen 15 consecutive years of gains in July… so, put that in your back pocket because we’ll revisit that profitable trend in a couple months. ***

Of course, the Dow’s streak in April came to an end in 2022 when the index ended the month down more than 5%. That was the worst performance for blue chips in April in the last 30 years.

But even the size of that worst performance demonstrates how solid of a month April tends to be. For comparison, the Dow has lost more than 5% in Sloppy September six times since 1993.

So, 2022 was more of an exception than the rule. We should see Awesome April return in force in 2023.

Now, you may remember that at the beginning of March I told investors it was about to get a whole lot better…

Only Fools Deny this Blooming Trend

And it has.

But historically, the best is yet to come. There’s a reliable history of gains made in April.

The Dow is averaging a 2.46% gain with a nearly 77% success rate in the month since 1993…

The QQQ has gained an average of 2.99% in April since 2007 with a 75% success rate…

The SPDR S&P 500 ETF (SPY) has averaged a gain of 2.42% in April since 2003 with an 80% success rate…

And the iShares Russell 2000 ETF (IWM) is averaging 1.8% in the month with a 65% success rate since 2003.

The biggest mistake most investors make is not understanding that stocks - just like seasons ­– tend to follow predictable trends.

And right now, the trend in April is your friend. In fact, one of the friendliest of the year.

So, don’t get fooled into falling for bearish headlines. Spring is here. It’s a time of new beginnings. And April is the strongest month of the year for stocks.

If you aren’t bullish yet, you should be.

Finishing up a 31-day March,

Matthew

Before you go rushing off to do all those things that make you great, do me a favor … Don’t worry, I’m not asking for money. But if you like what you read here, give me a like, comment or share this article with a friend. If you didn’t enjoy what you’ve read, tell me why. I’m not promising you won’t hurt my feelings, but I’m open to suggestions for improving content!

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© 2023 Matthew Carr

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This market commentary is opinion and for entertainment purposes only. The views and insights shared by the author are based on his many years of experience covering the markets. But they are subject to change without notice and opinions may become outdated. And there is no obligation by the author to update any information if these opinions become outdated. The information provided is obtained from sources believed to be reliable. But the author cannot guarantee its accuracy. Nothing in this email should be considered personalized investment advice. Investments should be made after consulting your financial advisor and after reviewing the financial statements of the company or companies in question.