Well, we had a market meltdown in the fourth quarter of 2018, but lately, we’ve had quite the rebound. Not back to the high levels of last September, but we’re getting pretty close. I think people are still cautiously optimistic that stocks are doing well and they’d like to participate in the returns, and clearly, they have a bias to buy high. As we know, many investors tend to pile into stocks after the market’s gone up, leading them to buy high and sell low. That’s what investors do.
On episode 66 of Bull Bear Radio, I mentioned that nine out of the 10 previous times since 1950 when the market was up more than 10% in Q1, the market finished in double digits for the year. And strong Q1 performance is usually followed by a softer Q2. Below is a breakout of that data.
As the weather warms and we begin to see trees turn green, what can we anticipate from markets? Using history as a guide, we expect to see a softer Q2 in 2019. It doesn’t mean it couldn’t be really good, but just trying to manage expectations for all those investors rushing into stocks. Great start, but we’ll have to wait and see how the year transpires.
For more on this topic, listen to Bull | Bear Radio Episode #66.
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