After yesterday’s blog post, I heard from several readers, asking why I was so sure March would be an up month for the overall market. And that’s a fair question. So far this year, the financial media has tried to scare you with: (1) the emerging market crisis, (2) a bogus chart that compared the current market to 1929, (3) the impact of severe winter weather hindering economic growth and now (4) the Ukrainian crisis and the Russian occupation of the Crimea Peninsula.
How could I possibly be bullish in the face of all of this? Well, today I’ll tell you exactly why I’m bullish about March and what you can do to make the most of what’s to come.
After making our way past these distractions, it’s clear that the market is headed higher: (1) the Fed remains very accommodative and is maintaining its 0% interest rate policy, (2) the S&P 500’s earnings are now near a three-year high and forecasted to rise every single quarter in 2014, (3) relentless corporate stock buybacks, which are now running about 24% higher than a year ago, is also a good sign, and (4) businesses, consumers and investors should all cheer up in the spring thaw as stronger economic news comes along with warmer temperatures in the coming months.
All of this adds to what is historically a strong time of year for the market. Over the past 50 years the S&P 500 has gained an average of 1% during the month of March. Going back over the past 11 months of March, the S&P 500 has gained 1.97% on average.
But as you can see below, it’s entirely possible to do even better. During that same 11-year period, my Blue Chip Growth Buy List–composed of the best blue chip stocks on the market right now–gained an average of 2.61%. How does it pull off this kind of outperformance year after year? Continue reading to find out.
The Secret to Success in March: A Winning Buy List Combination
If you’re already a member of Blue Chip Growth and are following my Buy List instructions, you’re in great shape to get the most out of March. I’ve just recommended several new buys, including three promising plays from the defense sector. While the U.S. military may have been downsized, these defense contractors are doing a booming business with U.S. allies. With drone sales and missile defense systems skyrocketing due to an increased nuclear threat and spy scandals and electronic eavesdropping a worldwide issue, this is an ideal environment for major U.S. defense contractors to boost their international business.
Beyond that, we have several top biotech stocks that are tremendous buys at current prices. After going on record-breaking runs earlier in the year, a few of them are taking a breather and are trading at very attractive prices. On top of this our Buy List is chock full of companies that return value to shareholders, whether in the form of dividends or stock buyback programs. We’ve had great success here in Blue Chip Growth owning companies with outstanding sales and earnings growth that also have strong institutional buying pressure, and I expect this winning combination to pay dividends in March.