March has been a pretty solid performing month for all the major stock market indexes. It has averaged gains of more than 1% in the Dow Jones Industrial Average and S&P 500 since 1950 (see “Vital March statistics,” below). The worst March occurred in 1980 when the major indexes set a multi-year low that has not been breached since. Though most analysts set the beginning of the historic multi-decade bull market of the 1980s and 1990s to 1982, the low was set in 1980 despite a U.S. recession that followed in 1981-82.
An interesting point considering more recent history. The top of that long bull market was set in the S&P 500 in March 2000. That top was not broken in the S&P until October 2007.
More recently, equity markets — across all major indexes — set the bottom of the 2008 credit crisis crash in March 2009. While March has generally produced solid performance there is some room for concern. The second worst March for the Dow and S&P 500 came in 2001, a year when a Republicans just took over the White House following a two-term Democrat and an historic bull market. Sound familiar? That year, a more than 10% drop in the S&P occurred in February, confirming a top that was set in 2000.
Given equity markets’ historic run-up since 2009 and March’s penchant for turning points, it may be wise to hedge some of your gains from the post-election bull move, or perhaps buy some strategic puts.