While there is no cute catchphrase for the performance of equities in April, it is one of the best performing months for equity indexes. In fact, since 1950 it is the strongest performing month for the Dow Jones Industrial Average, the third best performing month for the S&P 500 and the fourth best performing month for the Nasdaq Composite (see “Vital April statistics”).
The command to “sell in May and go away” may be simply a wise profit taking move following the typically strong April and above average performance for the six- month stretch from November through April.
April marks the beginning of spring and a new quarter. It also marks the culmination of the strongest six-month seasonal stretch on the calendar for equites. So, in one sense it could be viewed as the last best chance for traders to earn solid equity returns until the fourth quarter.
April has been profitable for the S&P 500 in seven of the last eight years, but only marginally so. The last huge move in April was 2009 following the credit crisis low. If equities experience a Q1 correction, April could provide a strong buying opportunity.