Saturday, April 7, 2018

MARCH IS OVER - WHEW!

If you don't invest in stocks and bonds, go on to something else.

March is over, but will April be any better?  An Article in Barron's gives us some hope. (quotes from the reference are in italics)
During that stretch, there were 46 positive Aprils and 22 negative ones.
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Say what you will, the Stock Traders’ Almanac found that the Dow had returned an average 7.6% between Nov. 1 and April 30, going back to 1950, compared with just 0.4% between May 1 and Oct. 31. The tendency for weakness in the middle of midterm election years is even more pronounced. The second and third quarters have been the weakest of the four-year cycle, with an average decline of 1.8% in the Dow industrials.

That historically sets up for the “sweet spot” of the four-year election cycle. From the fourth quarter of the midterms to the second quarter of the “pre-election” year, the Dow has averaged 20.4%.
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Then there’s the Fed, which is on track for another two, and maybe three, quarter-point interest-rate increases this year. The Treasury market is reacting anomalously, with longer yields coming down again. The yield curve, expressed in the spread between the two- and 10-year notes, has fallen to less than a half-percentage point. That’s made it the flattest since the financial crisis. The history of the yield curve suggests caution.

https://www.barrons.com/articles/the-fang-stocks-bite-back-1522454400

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