Market indexes ended February and started March on a high, but historically speaking, good luck streaks may not hold up until the new moon.
Yahoo Finance Senior Market Reporter Jared Blikre provides an in-depth analysis of stock performance in March, taking into account the election year and incumbent president seeking re-election.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by luke carberry morgan.
video transcript
Julie Hyman: March started off strong, but the good news may not last long. Woof woof, woof, woof, Jared Bricle. Here are the details: What's wrong, Jared?
Jared Breichle: Hey, why am I always throwing cold water on these gatherings?
Julie Hyman: I don't know. why you?
Jared Breichle: What can I say? Let me throw some cold water on my own analysis from a month ago. This is how I envision this year evolving, and I've sliced and diced it several ways. You can see that in February he had a negative balance in three different ways.
So if you think about all the years since 1949, and the fourth year of the presidential cycle, and the fourth year of the Democratic presidential cycle, that's Biden. In the end, all three were negative. But as it turns out, there's another way to cut things out that I hadn't thought of.
And this is year-round seasonality, expressed a little differently as an election year for a sitting president. So we have a president running for re-election. And you may remember 2020. That's the last time this happened. It also happens to be a pandemic year, and a pandemic outside of the president's control could tip things out of balance here a little bit in terms of that analysis.
So we did this in two different ways. This is from “The Stock Trader's Almanac”. Jeff Hirsch is working for you over there. Now, election years with a sitting president are colored purple. And if you remove 2020, things kind of normalize and there's not as much of a drop-off. But in any case, you'll notice that we don't really hit the ground running until mid-year.
It will be after June, around the beginning of July. Then things will go back to normal. So if you follow this pattern, you might end up spending a few slow months here.
I'm sure some of you remember last year, we had three months in the middle of the year where we did absolutely nothing, anything from flat to down, really. So we'll have to see if this works for you, but it might. Perhaps trading behavior will be a little sideways in March.
