March Performance Above Average in Midterm Years

Tempestuous March markets tend to drive prices up early in the month and batter stocks at month end. Julius Caesar failed to heed the famous warning to “beware the Ides of March” but investors have been served well when they have. Stock prices have a propensity to decline, sometimes rather precipitously, during the latter days of the month.

March packs a rather busy docket. It is the end of the first quarter, which brings with it Triple Witching and an abundance of portfolio maneuvers from The Street. March Triple-Witching Weeks have been quite bullish in recent years. But the week after is the exact opposite, DJIA down 20 of the last 30 years—and frequently down sharply for an average drop of 0.54%. Notable gains during the week after for DJIA of 4.9% in 2000, 3.1% in 2007, 6.8% in 2009, and 3.1% in 2011 are the rare exceptions to this historically poor performing timeframe.

Normally a solid performing market month, March improves modestly in midterm-election years (see Vital Statistics table below). In midterm years March ranks: 4^th best for DJIA and S&P 500 and 3^rd best for NASDAQ, Russell 1000 and Russell 2000. DJIA, S&P 500 and Russell 1000 have been up for five straight midterm Marchs.