MANY COMMENTATORS worry about the stock market in October, a month associated with the crashes of 1929 and 1987. But I now pay more attention to March—especially March 10.
As an observer of the stock market since 1980, I stumbled upon an odd coincidence. Major financial events this century, like stock market peaks and troughs, have centered on the month of March. Here are four examples:
March 10, 2000: The Nasdaq peaked at 5048. Between 1995 and that peak, the Nasdaq rose 400%. The dot-com bubble then burst and the Nasdaq didn’t return to its 2000 peak until 2015.
March 9, 2009: The market bottomed after 2008’s Great Financial Crisis. From October 2007 to March 2009, the S&P 500 declined 57%.
March 23, 2020: The stock market bottomed amid the pandemic panic selling. Fiscal and monetary stimulus went into overdrive, triggering a huge market rally.
March 10, 2023: Silicon Valley Bank became the second biggest U.S. bank failure ever.
What is it about March and the financial markets? I was hoping for help from ChatGPT, but I couldn’t figure out how to ask it the question. Any thoughts, fellow humans?
Not to mention the historic volatility within the bond market this March. The front end of treasury curve has been a great hiding spot for investors, however, futures in that market sold off quite a bit signaling rate cuts in the future. Will be interesting to see Jerome’s reaction to future CPI prints and how the Fed will land this plane. Looking like more Con-Air at this time.
The reality, to long term investors it’s all noise and needs to be ignored. Retirees have been provided a nice net in regards to fixed income being that fixed income “may” outperform over next several years. Inflation remains the key inhibitor to successful plans. A 25 to 50bps increase with inflation can be the difference between having money and moving in with your children. Stress test your plans with higher than average inflation.
I believe there’s a famous saying about stock investing (cannot recall the source): October is a perilous month to invest in stocks. The others are July, January, March, May, February, September, December, April, November, June and August.
Is this an Ides Idea?
I asked ChatGPT (Bing) and basically was told it’s probably coincidence. Meanwhile BARD (Google) basically told me there’s a lot of activity in the 1st quarter after year end loss taking which leads to volatility in the stock market. Then BARD gives some advice as follows: “Overall, there have been a number of factors that have contributed to the recent volatility in the financial markets. It is important to remember that volatility is a normal part of investing, and that it is important to have a long-term investment horizon.”. Maybe BARD needs to contribute to Humble Dollar 🙂
Bing did remind me that March 10 2020 the World Health Organization declared a pandemic.
Interesting observation about March and the financial markets. I don’t have Alexa, so I asked Siri for answers. It just gave me more research to do.