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April Could Shower Your Portfolio With Further Gains

April has historically rewarded investors with market gains, and this time may be no different even on the heels of a stellar first quarter performance.

Man holding money umbrella
John Lund\Sam Diephuis | Blend Images | Getty Images
Man holding money umbrella

“Historically, April has been a great month in the last five years,” noted Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “So from a seasonal point of view, we’re entering a bullish time frame.”

April has been a positive month for stocks in all five of the last five years, seeing an average increase of nearly 4.5 percent on the S&P 500. And in the last 10 years, April has handed in average gains of 2.2 percent, outperforming all the other months.

However, unlike past years, this April follows an impressive stock market runup in the first quarter, with the S&P posting an impressive 12 percent rally, the index’s best quarterly performance since 1998.

Still, Detrick said equities have further room to run based on expectations of a good upcoming earnings season and ongoing signs of improvement in the U.S. economy.

S&P 500 Last 5 Years

Month
No. of Returns
Average Return
Percent Positive
January 5 -2.94% 40%
February 5 -2.12% 40%
March 5 2.94% 60%
April 5 4.56% 100%
May 5 0.02% 60%
June 5 -3.51% 20%
July 5 1.59% 40%
August 5 -0.91% 60%
September 5 -0.07% 60%
October 5 -2.12% 60%
November 5 -0.95% 40%
December 5 1.90% 80%
Source: SchaefferÛªs Investment Research

“There’s still some concern on the economy, but we’re definitely seeing strong manufacturing, pulse in housing, better jobs reports…which should all translate into higher equity prices," he said. “And European issues are still present, but so far, the U.S. has decoupled from Europe.”

Detrick held his year-end target for the S&P 500 at 1,525.

Robert Doll, chief equity strategist at BlackRock, echoed Detrick’s comments.

“The first quarter is going to be tough to repeat, but our view is that monetary conditions are still good, the fundamentals are good…sentiment is still negative when you look at how people are positioned and valuation for risk assets is not stretched,” Doll told CNBC. “We don’t think we’ve seen the highfor the year.”

Still, some market pros such as John Hailer, president and CEO of Natixis Global Asset Management expressed a cautious tone.

“Volatility may be down, but it’s not an all-clear signal and I think one of the difficulties for investors going forward is what to do over the long term,” Hailer told CNBC. “Investing is a marathon—not a sprint. The first quarter is just the tenth of a mile in a marathon.”

Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC

Questions? Comments? Email us at marketinsider@cnbc.com

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  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

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