With the market opening a little higher today, things are looking better for investors this morning, but overall the market still appears extremely volatile. However, I remain bullish about the next two months. Today, I’m going to show you precisely why.
There are four main reasons for my bullishness regarding March and April. I want to share all of these reasons with you right now. Plus, I want to give you a sneak peek at what I foresee happening in May. But first of all…
Both March and April are seasonally strong months. In the past 20 years, the market’s gone up 1.8% in March and 2.3% in April. That’s based on the Dow. So, for a two-month combination, March and April make the second-strongest two-month period in the market. For the record, the strongest is actually a three-month period between October, November and December.
Next, there’s also quarter-end window dressing coming up at the end of March. Professional managers always clean up their portfolios at the end of each quarter. They assess how their earnings came out, and they place new bets for the next quarter. My Buy Lists tend to do very well during this quarter-end window dressing. So, I expect the second half of March to be absolutely spectacular for my members’ stocks.
The other good thing right now is that smart Beta ETFs realign every 90 days. The smart Beta ETFs have a fundamental overlay. They like to say their companies are better than the ETFs that just mimic index funds. But what’s happened is that those smart Beta ETFs will be adding to their positions at the end of this month. That’s been a big development for these kinds of ETFs that have taken over the world.
And finally, we’re still benefiting from new pension contributions. Everyone is starting to file their taxes, and they want to get their pension contribution in before the tax return goes in. This will continue into April. So, it’s going to be wonderful for the market and particularly for my members’ stocks.
Looking ahead even further, first-quarter analyst earnings revisions are the strongest ever recorded. Ever! So, April and May are going to be as good as it gets. Strong seasonal months, stunning sales and earnings, more and more P/E compression. Plus, the market’s not overvalued. It can’t be overvalued when the underlying fundamentals just keep getting better!
That’s all for today, I hope you’ll stay tuned into this blog where I’ll continue revealing actionable market insights to you each and every day.