As the stock market continues its bullish run in 2024, investors are looking ahead to April with optimism. Historically, April has been a strong month for the stock market, with an average return of 1.6% since 1945. In fact, April and December are tied as the best-performing months of the year for stocks.
During recessions, April’s positive performances can be even more pronounced. For example, in 2008 and 2009 amid the Great Recession, April produced returns of 4.8% and 9.4%, respectively. And in April 2020, in the wake of COVID-19, the stock market saw an enormous 12.7% gain.
One theory behind April’s positive performance is that investors receive tax refunds that month and inject that money into the market, pushing prices higher. While financial advisors caution against basing investment strategies solely on historical trends, the consistency of April’s strong performance is notable.
For buy-and-hold investors, the uncertainty surrounding the Federal Reserve’s decision on interest rates may be causing distress. However, it’s important to remember that over time, stock prices tend to tick upwards, with the S&P 500 seeing gains in 68% of the years it has existed. And historically, a significant amount of those gains have come in the month of April.
As investors navigate the current market conditions, it’s important to stay informed and consider all factors when making investment decisions. Subscribe to Daily Money for more of the latest personal finance news, stories, and analysis delivered to your inbox every day.
