Certainly, the stock market was forced to digest a huge amount during the first quarter. First, there was the brutal winter weather. Second, there was the latest flare-up in the Greek tragedy, with a deadline next week. Third, Putin continues to prove he is a better warmonger than economist. Fourth, the “just-in-time” supply savings used for corporate budgets nationwide was wasted on the west coast cargo strike. Fifth, the Fed all but officially announced an interest rate hike is certain this year. Sixth, the dollar got too strong, seriously hurting the earnings of large multinational companies, causing small caps (who are not export dependent) to outperform large cap companies (who are export dependent). Seventh, did I mention ISIS?
The stock market is shifting gears from a zero-interest-rate economy with the U.S. being the world’s economic engine to a rising-interest-rate economy with the rest of world finally starting to catch-up. This is also being done during a period of increased geopolitical uncertainty (think Iran negotiations). While it may not be fun, it is still not a bad thing, Stay invested and, most importantly, stay calm!
If you do need a little something to help you stay calm, take a look at this chart:
It shows that April is the best month of the year for the Dow. What it doesn’t show is that all that impressive gain traditionally enjoyed during the month of April actually occurs during the last half of the month. During the first half, investors are often selling stocks to pay their tax bills due at mid-month.
So, stay calm . . . and stay patient!