ETF Expert

I found an article at the Quant Investor web site rather intriguing. The writer postulates that, historically speaking, April experiences a great deal of growth in the third year of a presidential cycle.

Granted, there’s nothing new a bout the “3^rd year” rule of thumb. April rise, the 3^rd year of a presidential cycle has proved to be the strongest for stock assets throughout history. (Indeed, the last two – 1999 and 2003 – were exceptional!)

What makes the April analysis unique is the fact that, in the last 30 years, April posted 8 out of 9 positive results in the 3^rd year of a presidential cycle. More impressively, the average gain in the month of April in this analysis was a staggering 3.3%.

So could April be the start of bold new run-up for stocks? If one factors in strong fundamentals alongside new, tax-deferred dollars going into SEPs, Roths and Traditional IRAs, perhaps history will indeed repeat itself.

Should one be inclined to profit from potential seasonal trends, it would be best to stick with the analysis provided. In other words, if the market’s going to push towards an average gain of 3.3% this month, stick with highly liquid ETFs like the Dow Jones Industrials Index (DIA), the S&P 500 index (SPY) or the Vanguard Total Market Index (VTI).

Disclosure statement: Some of Pacific Park’s investment clients may hold positions in any of the investments mentioned above.